THE NEGOTIABLE INSTRUMENTS LAW
Form and Interpretation
1. Form of negotiable instruments. — An instrument to be
negotiable must conform to the following requirements:
It must be in writing and signed by the maker or drawer;
Must contain an unconditional promise or order to pay a sum certain
Must be payable on demand, or at a fixed or determinable future
Must be payable to order or to bearer; and
Where the instrument is addressed to a drawee, he must be named
or otherwise indicated therein with reasonable certainty.
2. Certainty as to sum; what constitutes. — The sum payable
is a sum certain within the meaning of this Act, although it is
to be paid —
With interest; or
By stated installments; or
By stated installments, with a provision that, upon default in
payment of any installment or of interest, the whole shall become
With exchange, whether at a fixed rate or at the current rate;
With costs of collection or an attorney's fee, in case payment
shall not be made at maturity.
3. When promise is unconditional. — An unqualified order
or promise to pay is unconditional within the meaning of this
Act though coupled with —
An indication of a particular fund out of which reimbursement
is to be made, or a particular account to be debited with the
A statement of the transaction which gives rise to the instrument.
an order or promise to pay out of a particular fund is not unconditional.
4. Determinable future time; what constitutes. — An instrument
is payable at a determinable future time, within the meaning of
this Act, which is expressed to be payable —
At a fixed period after date or sight; or
On or before a fixed or determinable future time specified therein;
On or at a fixed period after the occurrence of a specified event,
which is certain to happen, though the time of happening be uncertain.
instrument payable upon a contingency is not negotiable and the
happening of the event does not cure the defect.
5. Additional provision not affecting negotiability. — An
instrument which contains an order or promise to do any act in
addition to the payment of money is not negotiable. But the negotiable
character of an instrument otherwise negotiable is not affected
by a provision which —
Authorizes the sale of collateral securities in case the instrument
be not paid at maturity; or
(b) Authorizes a confession of judgment if the instrument be not
paid at maturity; or
Waives the benefit of any law intended for the advantage or protection
of the obligor; or
Gives the holder an election to require something to be done in
lieu of payment of money.
But nothing in this section shall validate any provision or stipulation
6. Omission; seal; particular money. — The validity and
negotiable character of an instrument are not affected by the
fact that —
It is not dated; or
Does not specify the value given; or
Does not specify the place where it is drawn or the place where
it is payable; or
Bears a seal; or
Designates a particular kind of current money in which payment
is to be made.
nothing in this section shall alter or repeal any statute requiring
in certain cases the nature of the consideration to be stated
in the instrument.
7. When payable on demand. — An instrument is payable on
When it is expressed to be so payable on demand, or at sight,
or on presentation; or
In which no time for payment is expressed.
an instrument is issued, accepted, or indorsed when overdue, it
is, as regards the person so issuing, accepting, or indorsing
it, payable on demand.
8. When payable to order. — The instrument is payable to
order where it is drawn payable to the order of a specified person
or to him or his order. It may be drawn payable to the order of
A payee who is not maker, drawer, or drawee; or
The drawer or maker; or
The drawee; or
Two or more payees jointly; or
One or some of several payees; or
The holder of an office for the time being.
the instrument is payable to order, the payee must be named or
otherwise indicated therein with reasonable certainty.
9. When payable to bearer. — The instrument is payable to
When it is expressed to be so payable; or
When it is payable to a person named therein or bearer; or
When it is payable to the order of a fictitious or non-existing
person, and such fact was known to the person making it so payable;
When the name of the payee does not purport to be the name of
any person; or
When the only or last indorsement is an indorsement in blank.
10. Terms, when sufficient. — The instrument need not follow
the language of this Act, but any terms are sufficient which clearly
indicate an intention to conform to the requirements hereof.
11. Date, presumption as to. — Where the instrument or an
acceptance or any indorsement thereon is dated, such date is deemed
prima facie to be the true date of the making, drawing, acceptance,
or indorsement, as the case may be.
12. Ante-dated and post-dated. — The instrument is not invalid
for the reason only that it is ante-dated or post-dated, provided
this is not done for an illegal or fraudulent purpose. The person
to whom an instrument so dated is delivered acquires the title
thereto as of the date of delivery.
13. When date may be inserted. — Where an instrument expressed
to be payable at a fixed period after date is issued undated,
or where the acceptance of an instrument payable at a fixed period
after sight is undated, any holder may insert therein the true
date of issue or acceptance, and the instrument shall be payable
accordingly. The insertion of a wrong date does not avoid the
instrument in the hands of a subsequent holder in due course;
but as to him, the date so inserted is to be regarded as the true
14. Blanks; when may be filled. — Where the instrument is
wanting in any material particular, the person in possession thereof
has a prima facie authority to complete it by filling up the blanks
therein. And a signature on a blank paper delivered by the person
making the signature in order that the paper may be converted
into a negotiable instrument operates as a prima facie authority
to fill it up as such for any amount. In order, however, that
any such instrument when completed may be enforced against any
person who became a party thereto prior to its completion, it
must be filled up strictly in accordance with the authority given
and within a reasonable time. But if any such instrument, after
completion, is negotiated to a holder in due course, it is valid
and effectual for all purposes in his hands, and he may enforce
it as if it had been filled up strictly in accordance with the
authority given and within a reasonable time.
15. Incomplete instrument not delivered. — Where an incomplete
instrument has not been delivered, it will not, if completed and
negotiated without authority, be a valid contract in the hands
of any holder, as against any person whose signature was placed
thereon before delivery.
16. Delivery; when effectual; when presumed. — Every contract
on a negotiable instrument is incomplete and revocable until delivery
of the instrument for the purpose of giving effect thereto. As
between immediate parties, and as regards a remote party other
than a holder in due course, the delivery, in order to be effectual,
must be made either by or under the authority of the party making,
drawing, accepting, or indorsing, as the case may be; and, in
such case, the delivery may be shown to have been conditional,
or for a special purpose only, and not for the purpose of transferring
the property in the instrument. But where the instrument is in
the hands of a holder in due course, a valid delivery thereof
by all parties prior to him so as to make them liable to him is
conclusively presumed. And where the instrument is no longer in
the possession of a party whose signature appears thereon, a valid
and intentional delivery by him is presumed until the contrary
17. Construction where instrument is ambiguous. — Where
the language of the instrument is ambiguous or there are omissions
therein, the following rules of construction apply:
Where the sum payable is expressed in words and also in figures
and there is a discrepancy between the two, the sum denoted by
the words is the sum payable; but if the words are ambiguous or
uncertain, reference may be had to the figures to fix the amount;
Where the instrument provides for the payment of interest, without
specifying the date from which interest is to run, the interest
runs from the date of the instrument, and if the instrument is
undated, from the issue thereof;
Where the instrument is not dated, it will be considered to be
dated as of the time it was issued;
Where there is a conflict between the written and printed provisions
of the instrument, the written provisions prevail;
Where the instrument is so ambiguous that there is doubt whether
it is a bill or note, the holder may treat it as either at his
Where a signature is so placed upon the instrument that it is
not clear in what capacity the person making the same intended
to sign, he is to be deemed an indorser;
Where an instrument containing the word "I promise to pay"
is signed by two or more persons, they are deemed to be jointly
and severally liable thereon.
18. Liability of person signing in trade or assumed name. —
No person is liable on the instrument whose signature does not
appear thereon, except as herein otherwise expressly provided.
But one who signs in a trade or assumed name will be liable to
the same extent as if he had signed in his own name.
19. Signature by agent; authority; how shown. — The signature
of any party may be made by a duly authorized agent. No particular
form of appointment is necessary for this purpose; and the authority
of the agent may be established as in other cases of agency.
20. Liability of person signing as agent, and so forth. —
Where the instrument contains or a person adds to his signature
words indicating that he signs for or on behalf of a principal,
or in a representative capacity, he is not liable on the instrument
if he was duly authorized; but the mere addition of words describing
him as an agent, or as filling a representative character, without
disclosing his principal, does not exempt him from personal liability.
21. Signature by procuration; effect of . — A signature
by "procuration" operates as notice that the agent has
but a limited authority to sign, and the principal is bound only
in case the agent in so signing acted within the actual limits
of his authority.
22. Effect of indorsement by infant or corporation.— The
indorsement or assignment of the instrument by a corporation or
by an infant passes the property therein, notwithstanding that
for want of capacity, the corporation or infant may incur no liability
23. Forged signature; effect of . — When a signature is
forged or made without the authority of the person whose signature
it purports to be, it is wholly inoperative, and no right to retain
the instrument, or to give a discharge therefor, or to enforce
payment thereof against any party thereto, can be acquired through
or under such signature, unless the party against whom it is sought
to enforce such right is precluded from setting up the forgery
or want of authority.
24. Presumption of consideration. — Every negotiable instrument
is deemed prima facie to have been issued for a valuable consideration;
and every person whose signature appears thereon to have become
a party thereto for value.
25. Value, what constitutes. — Value is any consideration
sufficient to support a simple contract. An antecedent or pre-existing
debt constitutes value; and is deemed such whether the instrument
is payable on demand or at a future time.
26. What constitutes holder for value. — Where value has
at any time been given for the instrument, the holder is deemed
a holder for value in respect to all parties who become such prior
to that time.
27. When lien on instrument constitutes holder for value. —
Where the holder has a lien on the instrument, arising either
from contract or by implication of law, he is deemed a holder
for value to the extent of his lien.
28. Effect of want of consideration. — Absence or failure
of consideration is a matter of defense as against any person
not a holder in due course; and partial failure of consideration
is a defense pro tanto, whether the failure is an ascertained
and liquidated amount or otherwise.
29. Liability of accommodation party. — An accommodation
party is one who has signed the instrument as maker, drawer, acceptor,
or indorser, without receiving value therefor, and for the purpose
of lending his name to some other person. Such a person is liable
on the instrument to a holder for value, notwithstanding such
holder, at the time of taking the instrument, knew him to be only
an accommodation party.
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 holder thereof. If payable
to bearer, it is negotiated by delivery; if payable to order,
it is negotiated by the indorsement of the holder completed by
31. Indorsement; how made. — The indorsement must be written
on the instrument itself or upon a paper attached thereto. The
signature of the indorser, without additional words, is a sufficient
32. Indorsement must be of entire instrument. — The indorsement
must be an indorsement of the entire instrument. An indorsement
which purports to transfer to the indorsee a part only of the
amount payable, or which purports to transfer the instrument to
two or more indorsees severally, does not operate as a negotiation
of the instrument. But where the instrument has been paid in part,
it may be indorsed as to the residue.
33. Kinds of indorsement. — An indorsement may be either
special or in blank; and it may also be either restrictive or
qualified, or conditional.
34. Special indorsement; indorsement in blank. — A special
indorsement specifies the person to whom, or to whose order, the
instrument is to be payable; and the indorsement of such indorsee
is necessary to the further negotiation of the instrument. An
indorsement in blank specifies no indorsee, and an instrument
so indorsed is payable to bearer, and may be negotiated by delivery.
35. Blank indorsement; how changed to special indorsement. —
The holder may convert a blank indorsement into a special indorsement
by writing over the signature of the indorser in blank any contract
consistent with the character of the indorsement.
36. When indorsement restrictive. — An indorsement is restrictive;
which either —
Prohibits the further negotiation of the instrument; or
Constitutes the indorsee the agent of the indorser; or
Vests the title in the indorsee in trust for or to the use of
some other persons.
the mere absence of words implying power to negotiate does not
make an indorsement restrictive.
SECTION 37. Effect of restrictive indorsement; rights of indorsee.
— A restrictive indorsement confers upon the indorsee the
To receive payment on the instrument;
To bring any action thereon that the indorser could bring;
To transfer his rights as such indorsee, where the form of the
indorsement authorizes him to do so.
all subsequent indorsees acquire only the title of the first indorsee
under the restrictive indorsement.
38. Qualified indorsement. — A qualified indorsement constitutes
the indorser a mere assignor of the title to the instrument. It
may be made by adding to the indorser's signature the words "without
recourse" or any words of similar import. Such an indorsement
does not impair the negotiable character of the instrument.
39. Conditional indorsement. — Where an indorsement is conditional,
the party required to pay the instrument may disregard the condition
and make payment to the indorsee or his transferee whether the
condition has been fulfilled or not. But any person to whom an
instrument so indorsed is negotiated will hold the same, or the
proceeds thereof, subject to the rights of the person indorsing
40. Indorsement of instrument payable to bearer. — Where
an instrument, payable to bearer, is indorsed specially, it may
nevertheless be further negotiated by delivery; but the person
indorsing specially is liable as indorser to only such holders
as make title through his indorsement.
41. Indorsement where payable to two or more persons. —
Where an instrument is payable to the order of two or more payees
or indorsees who are not partners, all must indorse, unless the
one indorsing has authority to indorse for the others.
42. 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 fiscal officer of a bank or corporation,
it is deemed prima facie to be payable to the bank or corporation
of which he is such officer, and may be negotiated by either the
indorsement of the bank or corporation, or the indorsement of
43. Indorsement where name is misspelled, and so forth. —
Where the name of a payee or indorsee is wrongly designated or
misspelled, he may indorse the instrument as therein described
adding, if he thinks fit, his proper signature.
44. Indorsement in representative capacity. — Where any
person is under obligation to indorse in a representative capacity,
he may indorse in such terms as to negative personal liability.
SECTION 45. Time of indorsement; presumption. — Except where
an indorsement bears date after the maturity of the instrument,
every negotiation is deemed prima facie to have been effected
before the instrument was overdue.
46. Place of indorsement. — Except where the contrary appears,
every indorsement is presumed prima facie to have been made at
the place where the instrument is dated.
47. Continuation of negotiable character. — An instrument
negotiable in its origin continues to be negotiable until it has
been restrictively indorsed or discharged by payment or otherwise.
48. Striking out indorsement. — The holder may at any time
strike out any indorsement which is not necessary to his title.
The indorser whose indorsement is struck out, and all indorsers
subsequent to him, are thereby relieved from liability on the
49. Transfer without indorsement; effect of . — Where the
holder of an instrument payable to his order transfers it for
value without indorsing it, the transfer vests in the transferee
such title as the transferor had therein, and the transferee acquires
in addition, the right to have the indorsement of the transferor.
But for the purpose of determining whether the transferee is a
holder in due course, the negotiation takes effect as of the time
when the indorsement is actually made.
50. When prior party may negotiate instrument. — Where an
instrument is negotiated back to a prior party, such party may,
subject to the provisions of this Act, reissue and further negotiable
the same. But he is not entitled to enforce payment thereof against
any intervening party to whom he was personally liable.
Rights of the Holder
51. Right of holder to sue; payment. — The holder of a negotiable
instrument may sue thereon in his own name; and payment to him
in due course, discharges the instrument.
52. What constitutes a holder in due course. — A holder
in due course is a holder who has taken the instrument under the
That it is complete and regular upon its face;
That he became the holder of it before it was overdue, and without
notice that it has been previously dishonored, if such was the
That he took it in good faith and for value;
That at the time it was negotiated to him, he had no notice of
any infirmity in the instrument or defect in the title of the
person negotiating it.
53. When person not deemed holder in due course. — Where
an instrument payable on demand is negotiated on an unreasonable
length of time after its issue, the holder is not deemed a holder
in due course.
54. Notice before full amount paid. — Where the transferee
receives notice of any infirmity in the instrument or defect in
the title of the person negotiating the same before he has paid
the full amount agreed to be paid therefor, he will be deemed
a holder in due course only to the extent of the amount therefore
paid by him.
55. When title defective. — The title of a person who negotiates
an instrument is defective within the meaning of this Act when
he obtained the instrument, or any signature thereto, by fraud,
duress, or force and fear, or other unlawful means, or for an
illegal consideration, or when he negotiates it in breach of faith,
or under such circumstances as amount to a fraud.
56. What constitutes notice of defect. — To constitute notice
of an infirmity in the instrument or defect in the title of the
person negotiating the same, the person to whom it is negotiated
must have had actual knowledge of the infirmity or defect, or
knowledge of such facts that his action in taking the instrument
amounted to bad faith.
57. Rights of holder in due course. — A holder in due course
holds the instrument free from any defect of title of prior parties,
and free from defenses available to prior parties among themselves,
and may enforce payment of the instrument for the full amount
thereof against all parties liable thereon.
58. When subject to original defenses. — In the hands of
any holder other than a holder in due course, a negotiable instrument
is subject to the same defenses as if it were non-negotiable.
But a holder who derives his title through a holder in due course,
and who is not himself a party to any fraud or illegality affecting
the instrument, has all the rights of such former holder in respect
of all parties prior to the latter.
59. Who is deemed holder in due course. — Every holder is
deemed prima facie to be a holder in due course; but when it is
shown that the title of any person who has negotiated the instrument
was defective, the burden is on the holder to prove that he or
some person under whom he claims acquired the title as holder
in due course. But the last-mentioned rule does not apply in favor
of a party who became bound on the instrument prior to the acquisition
of such defective title.
Liabilities of Parties
60. Liability of maker. — The maker of a negotiable instrument,
by making it, engages that he will pay it according to its tenor,
and admits the existence of the payee and his then capacity to
61. Liability of drawer. — The drawer by drawing the instrument
admits the existence of the payee and his then capacity to indorse;
and engages that, on due presentment, the instrument will be accepted
or paid, or both, according to its tenor, and that if it be dishonored
and the necessary proceedings on dishonor be duly taken, he will
pay the amount thereof to the holder or to any subsequent indorser
who may be compelled to pay it. But the drawer may insert in the
instrument an express stipulation negativing or limiting his own
liability to the holder.
62. Liability of acceptor. — The acceptor, by accepting
the instrument, engages that he will pay it according to the tenor
of his acceptance; and admits:
The existence of the drawer, the genuineness of his signature,
and his capacity and authority to draw the instrument; and
The existence of the payee and his then capacity to indorse.
63. When a person deemed indorser. — A person placing his
signature upon an instrument otherwise than as maker or acceptor,
is deemed to be an indorser, unless he clearly indicates by appropriate
words his intention to be bound in some other capacity.
64. Liability of irregular indorser. — Where a person, not
otherwise a party to an instrument, places thereon his signature
in blank before delivery, he is liable as indorser, in accordance
with the following rules:
If the instrument is payable to the order of a third person, he
is liable to the payee and to all subsequent parties.
If the instrument is payable to the order of the maker or drawer,
or is payable to bearer, he is liable to all parties subsequent
to the maker or drawer.
If he signs for the accommodation of the payee, he is liable to
all parties subsequent to the payee.
65. Warranty; where negotiation by delivery and so forth. —
Every person negotiating an instrument by delivery or by a qualified
That the instrument is genuine and in all respects what it purports
That he has a good title to it;
That all prior parties had capacity to contract;
That he has no knowledge of any fact which would impair the validity
of the instrument or render it valueless.
when the negotiation is by delivery only, the warranty extends
in favor of no holder other than the immediate transferee.
provisions of subdivision (c) of this section do not apply to
persons negotiating public or corporation securities, other than
bills and notes.
66. Liability of general indorser. — Every indorser who
indorses without qualification, warrants, to all subsequent holders
in due course:
The matters and things mentioned in subdivisions (a), (b), and
(c) of the next preceding section; and
That the instrument is, at the time of his indorsement, valid
in addition, he engages that, on due presentment, it shall be
accepted or paid, or both, as the case may be, according to its
tenor, and that if it be dishonored and the necessary proceedings
on dishonor be duly taken, he will pay the amount thereof to the
holder, or to any subsequent indorser who may be compelled to
67. Liability of indorser where paper negotiable by delivery.
— Where a person places his indorsement on an instrument
negotiable by delivery, he incurs all the liability of an indorser.
68. Order in which indorsers are liable. — As respects one
another, indorsers are liable prima facie in the order in which
they indorse; but evidence is admissible to show that, as between
or among themselves, they have agreed otherwise. Joint payees
or joint indorsees who indorse are deemed to indorse jointly and
69. Liability of an agent or broker. — Where a broker or
other agent negotiates an instrument without indorsement, he incurs
all the liabilities prescribed by Section 65 of this Act, unless
he discloses the name of his principal, and the fact that he is
acting only as agent.
Presentment for Payment
70. Effect of want of demand on principal debtor. — Presentment
for payment is not necessary in order to charge the person primarily
liable on the instrument; but if the instrument is, by its terms,
payable at a special place, and he is able and willing to pay
it there at maturity, such ability and willingness are equivalent
to a tender of payment upon his part. But, except as herein otherwise
provided, presentment for payment is necessary in order to charge
the drawer and indorsers.
71. Presentment, where instrument is not payable on demand; and
where payable on demand. — Where the instrument is not payable
on demand, presentment must be made on the day it falls due. Where
it is payable on demand, presentment must be made within a reasonable
time after its issue, but in the case of a bill of exchange, presentment
for payment will be sufficient if made within a reasonable time
after the last negotiation thereof.
72. What constitutes a sufficient presentment. — Presentment
for payment, to be sufficient, must be made:
By the holder, or by some person authorized to receive payment
on his behalf;
At a reasonable hour on a business day;
At a proper place as herein defined;
To the person primarily liable on the instrument, or if he is
absent or inaccessible, to any person found at the place where
the presentment is made.
73. Place of presentment. — Presentment for payment is made
at the proper place :
Where a place of payment is specified in the instrument and it
is there presented;
Where no place of payment is specified but the address of the
person to make payment is given in the instrument and it is there
Where no place of payment is specified and no address is given
and the instrument is presented at the usual place of business
or residence of the person to make payment;
In any other case if presented to the person to make payment wherever
he can be found, or if presented at his last known place of business
74. Instrument must be exhibited. — The instrument must
be exhibited to the person from whom payment is demanded, and
when it is paid, must be delivered up to the party paying it.
75. Presentment where instrument payable at bank. — Where
the instrument is payable at a bank, presentment for payment must
be made during banking hours, unless the person to make payment
has no funds there to meet it at any time during the day, in which
case presentment at any hour before the bank is closed on that
day is sufficient.
76. Presentment where principal debtor is dead. — Where
the person primarily liable on the instrument is dead and no place
of payment is specified, presentment for payment must be made
to his personal representative, if such there be, and if, with
the exercise of reasonable diligence, he can be found.
77. Presentment to persons liable as partners. — Where the
persons primarily liable on the instrument are liable as partners,
and no place of payment is specified, presentment for payment
may be made to any of them, even though there has been a dissolution
of the firm.
78. Presentment to joint debtors. — Where there are several
persons not partners, primarily liable on the instrument, and
no place of payment is specified, presentment must be made to
79. When presentment not required to charge the drawer. —
Presentment for payment is not required in order to charge the
drawer where he has no right to expect or require that the drawee
or acceptor will pay the instrument.
80. When presentment not required to charge the indorser. —
Presentment is not required in order to charge an indorser where
the instrument was made or accepted for his accommodation and
he has no reason to expect that the instrument will be paid if
81. When delay in making presentment is excused. — Delay
in making presentment for payment is excused when the delay is
caused by circumstances beyond the control of the holder, and
not imputable to his default, misconduct, or negligence. When
the cause of delay ceases to operate, presentment must be made
with reasonable diligence.
82. When presentment for payment is excused. — Presentment
for payment is excused:
(a) Where after the exercise of reasonable diligence, presentment
as required by this Act, cannot be made;
Where the drawee is a fictitious person;
By waiver of presentment, expressed or implied.
83. When instrument dishonored by non-payment. — The instrument
is dishonored by non-payment when:
It is duly presented for payment and payment is refused or cannot
be obtained; or
Presentment is excused and the instrument is overdue and unpaid.
84. Liability of person secondarily liable, when instrument dishonored.
— Subject to the provisions of this Act, when the instrument
is dishonored by non-payment, an immediate right of recourse to
all parties secondarily liable thereon accrues to the holder.
85. Time of maturity. — Every negotiable instrument is payable
at the time fixed therein without grace. When the day of maturity
falls upon Sunday, or a holiday, the instrument is payable on
the next succeeding business day. Instruments falling due or becoming
payable on Saturday are to be presented for payment on the next
succeeding business day, except instruments payable on demand
which may, at the option of the holder, be presented for payment
before twelve o'clock noon on Saturday when that entire day is
not a holiday.
86. Time; how commuted. — When the instrument is payable
at a fixed period after date, after sight, or after that happening
of a specified event, the time of payment is determined by excluding
the day from which the time is to begin to run, and by including
the date of payment.
87. Rule where instrument payable at bank. — Where the instrument
is made payable at a bank, it is equivalent to an order to the
bank to pay the same for the account of the principal debtor thereon.
88. What constitutes payment in due course. — Payment is
made in due course when it is made at or after the maturity of
the payment to the holder thereof in good faith and without notice
that his title is defective.
Notice of Dishonor
89. To whom notice of dishonor must be given. — Except as
herein otherwise provided, when a negotiable instrument has been
dishonored by non-acceptance or non-payment, notice of dishonor
must be given to the drawer and to each indorser, and any drawer
or indorser to whom such notice is not given is discharged.
90. By whom given. — The notice may be given by or on behalf
of the holder, or by or on behalf of any party to the instrument
who might 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.
91. Notice given by 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
92. Effect of notice given on behalf of holder. — Where
notice is given by or on behalf of the holder, it inures to the
benefit of all subsequent holders and all prior parties who have
a right of recourse against the party to whom it is given.
93. Effect where notice is given by party entitled thereto. —
Where notice is given by or on behalf of a party entitled to give
notice, it inures to the benefit of the holder and all parties
subsequent to the party to whom notice is given.
94. When agent may give notice. — Where the instrument has
been dishonored in the hands of an agent, he may either himself
give notice to the parties liable thereon, or he may give notice
to his principal. If he gives notice to his principal, he must
do so within the same time as if he were the holder, and the principal,
upon the receipt of such notice, has himself the same time for
giving notice as if the agent had been an independent holder.
95. When notice sufficient. — A written notice need not
be signed, and an insufficient written notice may be supplemented
and validated by verbal communication. A misdescription of the
instrument does not vitiate the notice unless the party to whom
the notice is given is in fact misled thereby.
96. Form of notice. — The notice may be in writing or merely
oral, and may be given in any terms which sufficiently identify
the instrument, and indicate that it has been dishonored by non-acceptance
or non-payment. It may in all cases be given by delivering it
personally or through the mails.
97. To whom notice may be given. — Notice of dishonor may
be given either to the party himself or to his agent in that behalf.
98. Notice where party is dead. — When any party is dead,
and his death is known to the party giving notice, the notice
must be given to a personal representative, if there be one, and
if with reasonable diligence, he can be found. If there be no
personal representative, notice may be sent to the last residence
or last place of business of the deceased.
99. Notice of partners. — When the parties to be notified
are partners, notice to any one partner is notice to the firm,
even though there has been a dissolution.
100. Notice to persons jointly liable. — Notice to joint
parties who are not partners must be given to each of them, unless
one of them has authority to receive such notice for the others.
101. Notice to bankrupt. — Where a party has been adjudged
a bankrupt or an insolvent, or has made an assignment for the
benefit of creditors, notice may be given either to the party
himself or to his trustee or assignee.
102. Time within which notice must be given. — Notice may
be given as soon as the instrument is dishonored; and unless delay
is excused as hereinafter provided, must be given within the time
fixed by this Act.
103. Where parties reside in same place. — Where the person
giving and the person to receive notice reside in the same place,
notice must be given within the following times:
If given at the place of business of the person to receive notice,
it must be given before the close of business hours on the day
If sent by mail, it must be deposited in the post-office in time
to reach him in usual course on the day following.
104. Where parties reside in different places. — Where the
person giving and the person to receive notice reside in different
places, the notice must be given within the following times:
If sent by mail, it must be deposited in the post office in time
to go by mail the day following the day of dishonor, or if there
be no mail at a convenient hour on that day, by the next mail
If given otherwise than through the post-ffice, then 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
in the last subdivision.
105. When sender deemed to have given due notice. — Where
notice of dishonor is duly addressed and deposited in the post-ffice,
the sender is deemed to have given due notice, notwithstanding
any miscarriage in the mails.
106. Deposit in post-office; what constitutes. — Notice
is deemed to have been deposited in the post-office when deposited
in any branch post-office or in any letter box under the control
of the post-office department.
107. Notice of subsequent party; time of. — Where a party
receives notice of dishonor, he has, after the receipt of such
notice, the same time for giving notice to antecedent parties
that the holder has after the dishonor.
108. Where notice must be sent. — Where a party has added
an address to his signature, notice of dishonor must be sent to
that address; but if he has not given such address, then the notice
must be sent as follows:
Either to the post-office nearest to his place of residence or
to the post-office where he is accustomed to receive his letters;
If he lives in one place and has his place of business in another,
notice may be sent to either place; or
If he is sojourning in another place, notice may be sent to the
place where he is sojourning.
But where the notice is actually received by the party within
the time specified in this Act, it will be sufficient though not
sent in accordance with the requirement of this section.
109. Waiver of notice. — Notice of dishonor may be waived
either before the time of giving notice has arrived or after the
omission to give due notice, and the waiver may be expressed or
110. Whom affected by waiver. — Where the waiver is embodied
in the instrument itself, it is binding upon all parties; but,
where it is written above the signature of an indorser, it binds
111. Waiver of protest. — A waiver of protest, whether in
the case of a foreign bill of exchange or other negotiable instrument,
is deemed to be a waiver not only of a formal protest but also
of presentment and notice of dishonor.
112. When notice is dispensed with. — Notice of dishonor
is dispensed with when, after the exercise of reasonable diligence,
it cannot be given to or does not reach the parties to be charged.
113. Delay in giving notice; how excused. — Delay in giving
notice of dishonor is excused when the delay is caused by circumstances
beyond the control of the holder and not imputable to his default,
misconduct, or negligence. When the cause of delay ceases to operate,
notice must be given with reasonable diligence.
114. When notice need not be given to drawer. — Notice of
dishonor is not required to be given to the drawer in either of
the following cases:
Where the drawer and drawee are the same person;
When the drawee is fictitious person or a person not having capacity
When the drawer is the person to whom the instrument is presented
Where the drawer has no right to expect or require that the drawee
or acceptor will honor the instrument;
Where the drawer has countermanded payment.
115. When notice need not be given to indorser. — Notice
of dishonor is not required to be given to an indorser in either
of the following cases:
When the drawee is a fictitious person or a person not having
capacity to contract, and the indorser was aware of that fact
at the time he indorsed the instrument;
Where the indorser is the person to whom the instrument is presented
Where the instrument was made or accepted for his accommodation.
116. Notice of non-payment where acceptance refused. — Where
due notice of dishonor by non-acceptance has been given, notice
of a subsequent dishonor by non-payment is not necessary, unless
in the meantime the instrument has been accepted.
117. Effect of omission to give notice of non-acceptance. —
An omission to give notice of dishonor by non-acceptance does
not prejudice the rights of a holder in due course subsequent
to the omission.
118. When protest need not be made; when must be made. —
Where any negotiable instrument has been dishonored, it may be
protested for non-acceptance or non-payment, as the case may be;
but protest is not required except in the case of foreign bills
Discharge of Negotiable Instrument
119. Instrument; how discharged. — A negotiable instrument
By payment in due course by or on behalf of the principal debtor;
By payment in due course by the party accommodated, where the
instrument is made or accepted for his accommodation;
By the intentional cancellation thereof by the holder;
By any other act which will discharge a simple contract for the
payment of money;
When the principal debtor becomes the holder of the instrument
at or after maturity in his own right.
120. When persons secondarily liable on the instrument are discharged.
— A person secondarily liable on the instrument is discharged:
By any act which discharges the instrument;
By the intentional cancellation of his signature by the holder;
By the discharge of a prior party;
By a valid tender or payment made by a prior party;
By a release of the principal debtor, unless the holder's right
of recourse against the party secondarily liable is expressly
By any agreement binding upon the holder to extend the time of
payment, or to postpone the holder's right to enforce the instrument,
unless made with the assent of the party secondarily liable, or
unless the right of recourse against such party is expressly reserved.
121. Right of party who discharges instrument. — Where the
instrument is paid by a party secondarily liable thereon, it is
not discharged; but the party so paying it is remitted to his
former rights as regard all prior parties, and he may strike out
his own and all subsequent indorsements and against negotiate
the instrument, except:
Where it is payable to the order of a third person and has been
paid by the drawer; and
Where it was made or accepted for accommodation and has been paid
by the party accommodated.
122. Renunciation by holder. — The holder may expressly
renounce his rights against any party to the instrument before,
at, or after its maturity. An absolute and unconditional renunciation
of his rights against the principal debtor made at or after the
maturity of the instrument discharges the instrument. But a renunciation
does not affect the rights of a holder in due course without notice.
A renunciation must be in writing, unless the instrument is delivered
up to the person primarily liable thereon.
123. Cancellation; unintentional; burden of proof . — A
cancellation made unintentionally, or under a mistake or without
the authority of the holder, is inoperative, but where an instrument
or any signature thereon appears to have been cancelled, the burden
of proof lies on the party who alleges that the cancellation was
made unintentionally, or under a mistake or without authority.
124. Alteration of instrument; effect of . — Where a negotiable
instrument is materially altered without the assent of all parties
liable thereon, it is avoided, except as against a party who has
himself made, authorized, or assented to the alteration and subsequent
when an instrument has been materially altered and is in the hands
of a holder in due course not a party to the alteration, he may
enforce payment thereof according to its original tenor.
125. What constitutes a material alteration. — Any alteration
The sum payable, either for principal or interest;
The time or place of payment:
The number or the relations of the parties;
The medium or currency in which payment is to be made;
which adds a place of payment where no place of payment is specified,
or any other change or addition which alters the effect of the
instrument in any respect is a material alteration.
Bills of Exchange
126. Bill of exchange, defined. — A bill of exchange is
an unconditional order in writing addressed by one person to another,
signed by the person giving it, requiring the person to whom it
is addressed to pay on demand or at a fixed or determinable future
time a sum certain in money to order or to bearer.
127. Bill not an assignment of funds in hands of drawee. —
A bill of itself does not operate as an assignment of the funds
in the hands of the drawee available for the payment thereof,
and the drawee is not liable on the bill unless and until he accepts
128. Bill addressed to more than one drawee. — A bill may
be addressed to two or more drawees jointly, whether they are
partners or not; but not to two or more drawees in the alternative
or in succession.
129. Inland and foreign bills of exchange. — An inland bill
of exchange is a bill which is, or on its face purports to be,
both drawn and payable within the Philippines. Any other bill
is a foreign bill. Unless the contrary appears on the face of
the bill, the holder may treat it as an inland bill.
130. When bill may be treated as promissory note. — Where
in a bill the drawer and drawee are the same person, or where
the drawee is a fictitious person, or a person not having capacity
to contract, the holder may treat the instrument, at his option,
either as a bill of exchange or as a promissory note.
131. Referee in case of need. — The drawer of a bill and
any indorser may insert thereon the name of a person to whom the
holder may resort in case of need; that is to say, in case the
bill is dishonored by non-acceptance or non-payment. Such person
is called a referee in case of 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.
132. Acceptance; how made and so forth. — The acceptance
of a bill is the signification by the drawee of his assent to
the order of the drawee. The acceptance must be in writing and
signed by the drawee. It must not express that the drawee will
perform his promise by any other means than the payment of money.
133. Holder entitled to acceptance on face of bill. — The
holder of a bill presenting the same for acceptance may require
that the acceptance be written on the bill, and if such request
is refused, may treat the bill as dishonored.
134. Acceptance by separate instrument. — Where an acceptance
is written on a paper other than the bill itself, it does not
bind the acceptor except in favor of a person to whom it is shown
and who, on the faith thereof, receives the bill for value.
135. Promise to accept; when equivalent to acceptance. —
An unconditional promise in writing to accept a bill before it
is drawn is deemed an actual acceptance in favor of every person
who, upon the faith thereof, receives the bill for value.
136. Time allowed drawee to accept. — The drawee is allowed
twenty-four hours after presentment in which to decide whether
or not he will accept the bill; the acceptance, if given, dates
as of the day of presentation.
137. Liability of drawee retaining or destroying bill. —
Where a drawee to whom a bill is delivered for acceptance destroys
the same, or refuses within twenty-four hours after such delivery,
or within such other period as the holder may allow, to return
the bill accepted or non-accepted to the holder, he will be deemed
to have accepted the same.
138. Acceptance of incomplete bill. — A bill may be accepted
before it has been signed by the drawer, or while otherwise incomplete,
or when it is overdue, or after it has been dishonored by a previous
refusal to accept, or by non-payment. But when a bill payable
after sight is dishonored by non-acceptance and the drawee subsequently
accepts it, the holder, in the absence of any different agreement,
is entitled to have the bill accepted as of the date of the first
139. Kinds of acceptance. — An acceptance is either general
or qualified. A general acceptance assents without qualification
to the order of the drawer. A qualified acceptance in express
terms varies the effect of the bill as drawn.
140. What constitutes a general acceptance. — An acceptance
to pay at a particular place is a general acceptance unless it
expressly states that the bill is to be paid there only and not
141. Qualified acceptance. — An acceptance is qualified
Conditional; that is to say, which makes payment by the acceptor
dependent on the fulfillment of a condition therein stated;
Partial; that is to say, an acceptance to pay part only of the
amount for which the bill is drawn;
Local; that is to say, an acceptance to pay only at a particular
Qualified as to time;
The acceptance of some, one or more of the drawees but not of
142. Rights of parties as to qualified acceptance. — The
holder may refuse to take a qualified acceptance and if he does
not obtain an unqualified acceptance, he may treat the bill as
dishonored by non-acceptance. Where a qualified acceptance is
taken, the drawer and indorsers are discharged from liability
on the bill, unless they have expressly or impliedly authorized
the holder to take a qualified acceptance, or subsequently assent
thereto. When the drawer or an indorser receives notice of a qualified
acceptance, he must, within a reasonable time, express his dissent
to the holder or he will be deemed to have assented thereto.
Presentment for Acceptance
143. When presentment for acceptance must be made. — Presentment
for acceptance must be made:
Where the bill is payable after sight, or in any other case, where
presentment for acceptance is necessary in order to fix the maturity
of the instrument; or
Where the bill expressly stipulates that it shall be presented
for acceptance; or
Where the bill is drawn payable elsewhere than at the residence
or place of business of the drawee.
no other case is presentment for acceptance necessary in order
to render any party to the bill liable.
144. When failure to present releases drawer and indorser. —
Except as herein otherwise provided, the holder of a bill which
is required by the next preceding section to be presented for
acceptance must either present it for acceptance or negotiate
it within a reasonable time. If he fails to do so, the drawer
and all indorsers are discharged.
145. Presentment; how made. — Presentment for acceptance
must be made by or on behalf of the holder at a reasonable hour,
on a business day and before the bill is overdue, to the drawee
or some person authorized to accept or refuse acceptance on his
Where a bill is addressed to two or more drawees who are not partners,
presentment must be made to them all, unless one has authority
to accept or refuse acceptance for all, in which case presentment
may be made to him only;
Where the drawee is dead, presentment may be made to his personal
Where the drawee has been adjudged a bankrupt or an insolvent,
or has made an assignment for the benefit of creditors, presentment
may be made to him or to his trustee or assignee.
146. On what days presentment may be made. — A bill may
be presented for acceptance on any day on which negotiable instruments
may be presented for payment under the provisions of Sections
72 and 85 of this Act. When Saturday is not otherwise a holiday,
presentment for acceptance may be made before twelve o'clock,
noon, on that day.
147. Presentment; where time is insufficient. — Where the
holder of a bill drawn payable elsewhere than at the place of
business, or the residence of the drawee has no time, with the
exercise of reasonable diligence, to present the bill for acceptance
before presenting it for payment on the day that it falls due,
the delay caused by presenting the bill for acceptance before
presenting it for payment is excused, and does not discharge the
drawers and indorsers.
148. Where presentment is excused. — Presentment for acceptance
is excused, and a bill may be treated as dishonored by non-acceptance,
in either of the following cases:
Where the drawee is dead, or has absconded, or is a fictitious
person or a person not having capacity to contract by bill.
Where, after the exercise of reasonable diligence, presentment
can not be made.
Where, although presentment has been irregular, acceptance has
been refused on some other ground.
149. When dishonored by non-acceptance. — A bill is dishonored
by non-acceptance :
When it is duly presented for acceptance and such an acceptance
as is prescribed by this Act is refused or can not be obtained;
When presentment for acceptance is excused, and the bill is not
150. Duty of holder where bill not accepted. — Where a bill
is duly presented for acceptance and is not accepted within the
prescribed time, the person presenting it must treat the bill
as dishonored by non-acceptance or he loses the right of recourse
against the drawer and indorsers.
151. Right of holder where bill not accepted. — When a bill
is dishonored by non-acceptance, an immediate right of recourse
against the drawer and indorsers accrues to the holder and no
presentment for payment is necessary.
152. In what cases protest necessary. — Where a foreign
bill appearing on its face to be such is dishonored by non-acceptance,
it must be duly protested for non-acceptance, and where such bill
which has not previously been dishonored by non-acceptance is
dishonored by non-payment, it must be duly protested for non-payment.
If it is not so protested, the drawer and indorsers are discharged.
Where a bill does not appear on its face to be a foreign bill,
protest thereof in case of dishonor is unnecessary.
153. Protest; how made. — The protest must be annexed to
the bill, or must contain a copy thereof, and must be under the
hand and seal of the notary making it, and must specify:
The time and place of presentment;
The fact that presentment was made and the manner thereof;
The cause or reason for protesting the bill;
The demand made and the answer given, if any, or the fact that
the drawee or acceptor could not be found.
154. Protest, by whom made. — Protest may be made by:
A notary public; or
By any respectable resident of the place where the bill is dishonored,
in the presence of two or more credible witnesses.
155. Protest; when to be made. — When a bill is protested,
such protest must be made on the day of its dishonor unless delay
is excused as herein provided. When a bill has been duly noted,
the protest may be subsequently extended as of the date of the
156. Protest; where made. — A bill must be protested at
the place where it is dishonored, except that when a bill drawn
payable at the place of business or residence of some person other
than the drawee has been dishonored by non-acceptance, it must
be protested for non-payment at the place where it is expressed
to be payable, and no further presentment for payment to, or demand
on the drawee is necessary.
157. Protest both for non-acceptance and non-payment. —
A bill which has been protested for non-acceptance may be subsequently
protested for non-payment.
158. Protest before maturity where acceptor insolvent. —
Where the acceptor has been adjudged a bankrupt or an insolvent,
or has made an assignment for the benefit of creditors before
the bill matures, the holder may cause the bill to be protested
for better security against the drawer and indorsers.
159. When protest dispensed with. — Protest is dispensed
with by any circumstances which would dispense with notice of
dishonor. Delay in noting or protesting is excused when delay
is caused by circumstances beyond the control of the holder and
not imputable to his default, misconduct, or negligence. When
the cause of delay ceases to operate, the bill must be noted or
protested with reasonable diligence.
160. Protest where bill is lost and so forth. — When a bill
is lost or destroyed or is wrongly detained from the person entitled
to hold it, protest may be made on a copy or written particulars
Acceptance for Honor
161. When bill may be accepted for honor. — When a bill
of exchange has been protested for dishonor by non-acceptance
or protested for better security and is not overdue, any person
not being a party already liable thereon may, with the consent
of the holder, intervene and accept the bill supra protest for
the honor of any party liable thereon, or for the honor of the
person for whose account the bill is drawn. The acceptance for
honor may be for part only of the sum for which the bill is drawn;
and where there has been an acceptance for honor for one party,
there may be a further acceptance by a different person for the
honor of another party.
162. Acceptance for honor; how made. — An acceptance for
honor supra protest must be in writing and indicate that it is
an acceptance for honor, and must be signed by the acceptor for
163. When deemed to be an acceptance for honor of the drawer.
— Where an acceptance for honor does not expressly state
for whose honor it is made, it is deemed to be an acceptance for
the honor of the drawer.
164. Liability of the acceptor for honor. — The acceptor
for honor is liable to the holder and to all parties to the bill
subsequent to the party for whose honor he has accepted.
165. Agreement of acceptor for honor. — The acceptor for
honor, by such acceptance, engages that he will, on due presentment,
pay the bill according to the terms of his acceptance provided
it shall not have been paid by the drawee and provided also that
is shall have been duly presented for payment and protested for
non-payment and notice of dishonor given to him.
166. Maturity of bill payable after sight; accepted for 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 acceptance for honor.
167. Protest of bill accepted for honor, and so forth. —
Where a dishonored bill has been accepted for honor supra protest
or contains a referee in case of need, it must be protested for
non-payment before it is presented for payment to the acceptor
for honor or referee in case of need.
168. Presentment for payment to acceptor for honor; how made.
— Presentment for payment to the acceptor for honor must
be made as follows:
If it is to be presented in the place where the protest for non-payment
was made, it must be presented not later than the day following
If it is to be presented in some other place than the place where
it was protested, then it must be forwarded within the time specified
in Section 104.
169. When delay in making presentment is excused. — The
provisions of Section 81 apply where there is delay in making
presentment to the acceptor for honor or referee in case of need.
170. Dishonor of bill by acceptor for honor. — When the
bill is dishonored by the acceptor for honor, it must be protested
for non-payment by him.
Payment for Honor
171. Who may make payment for honor. — Where a bill has
been protested for non-payment, any person may intervene and pay
it supra protest for the honor of any person liable thereon, or
for the honor of the person for whose account it was drawn.
172. Payment for honor; how made. — The payment for honor
supra protest, in order to operate as such and not as a mere voluntary
payment, must be attested by a notarial act of honor which may
be appended to the protest or form an extension to it.
SECTION 173. Declaration before payment for honor. — The
notarial act of honor must be founded on a declaration made by
the payer for honor, or by his agent in that behalf, declaring
his intention to pay the bill for honor and for whose honor he
174. Preference of parties offering to pay for honor. —
Where two or more persons offer to pay a bill for the honor of
different parties, the person whose payment will discharge most
parties to the bill is to be given the preference.
175. Effect on subsequent parties where bill is paid for honor.
— Where a bill has been paid for honor, all parties subsequent
to the party for whose honor it is paid are discharged, but the
payer for honor is subrogated for, and succeeds to, both the rights
and duties of the holder as regards the party for whose honor
he pays and all parties liable to the latter.
176. Where holder refuses to receive payment supra protest. —
Where the holder of a bill refuses to receive payment supra protest,
he loses his right of recourse against any party who would have
been discharged by such payment.
177. Rights of payer for honor. — The payer for honor, on
paying to the holder the amount of the bill and the notarial expenses
incidental to its dishonor, is entitled to receive both the bill
itself and the protest.
Bills in a Set
178. Bills in set constitute one bill. — Where a bill is
drawn in a set, each part of the set being numbered and containing
a reference to the other parts, the whole of the parts constitutes
179. Rights of holders where different parts are negotiated. —
Where two or more parts of a set are negotiated to different holders
in due course, the holder whose title first accrues is, as between
such holders, the true owner of the bill. But nothing in this
section affects the rights of a person who, in due course, accepts
or pays the parts first presented to him.
180. Liability of holder who indorses two or more parts of a set
to different persons. — When the holder of a set indorses
two or more parts to different persons he is liable on every such
part, and every indorser subsequent to him is liable on the part
he has himself indorsed, as if such parts were separate bills.
181. Acceptance of bills drawn in sets. — The acceptance
may be written on any part and it must be written on one part
only. If the drawee accepts more than one part and such accepted
parts negotiated to different holders in due course, he is liable
on every such part as if it were a separate bill.
SECTION 182. Payment by acceptor of bills drawn in sets. —
When the acceptor of a bill drawn in a set pays it without requiring
the part bearing his acceptance to be delivered up to him, and
the part at maturity is outstanding in the hands of a holder in
due course, he is liable to the holder thereon.
183. Effect of discharging one of a set. — Except as herein
otherwise provided, where any one part of a bill drawn in a set
is discharged by payment or otherwise, the whole bill is discharged.
Promissory Notes and Checks
184. Promissory note, defined. — A negotiable promissory
note, within the meaning of this Act, is an unconditional promise
in writing made by one person to another, signed by the maker,
engaging to pay on demand, or at a fixed or determinable future
time, a sum certain in money to order or to bearer. Where a note
is drawn to the maker's own order, it is not complete until indorsed
SECTION 185. Check, defined. — A check is a bill of exchange
drawn on a bank payable on demand. Except as herein otherwise
provided, the provisions of this Act applicable to a bill of exchange
payable on demand apply to a check.
186. Within what time a check must be presented. — A check
must be presented for payment within a reasonable time after its
issue or the drawer will be discharged from liability thereon
to the extent of the loss caused by the delay.
187. Certification of check; effect of . — Where a check
is certified by the bank on which it is drawn, the certification
is equivalent to an acceptance.
188. Effect where the holder of check procures it to be accepted
or certified. — Where the holder of a check procures it
to be accepted or certified, the drawer and all indorsers are
discharged from liability thereon.
189. When check operates as an assignment. — A check of
itself does not operate as an assignment of any part of the funds
to the credit of the drawer with the bank, and the bank is not
liable to the holder, unless and until it accepts or certifies
190. Short title. — This Act shall be known as the Negotiable
191. Definition and meaning of terms. — In this Act, unless
the context otherwise requires:
"Acceptance" means an acceptance completed by delivery
includes counterclaim and set-off;
includes any person or association of persons carrying on the
business of banking, whether incorporated or not;
means the person in possession of a bill or note which is payable
means bill of exchange, and "note" means negotiable
means transfer of possession, actual or constructive, from one
person to another;
means the payee or indorsee of a bill or note who is in possession
of it, or the bearer thereof;
means an indorsement completed by delivery;
means negotiable instrument;
means the first delivery of the instrument, complete in form,
to a person who takes it as a holder;
includes a body of persons, whether incorporated or not;
means valuable consideration;
includes printed, and "writing" includes print.
192. Persons primarily liable on instrument. — The person
"primarily" liable on an instrument is the person who,
by the terms of the instrument, is absolutely required to pay
the same. All other parties are "secondarily" liable.
193. Reasonable time, what constitutes. — In determining
what is a "reasonable time" or an "unreasonable
time," regard is to be had to the nature of the instrument,
the usage of trade or business with respect to such instruments,
and the facts of the particular case.
194. Time, how computed; when last day falls on holiday. —
Where the day, or the last day for doing any act herein required
or permitted to be done falls on a Sunday or on a holiday, the
act may be done on the next succeeding secular or business day.
195. Application of Act. — The provisions of this Act do
not apply to negotiable instruments made and delivered prior to
the taking effect hereof.
196. Cases not provided for in Act. — Any case not provided
for in this Act shall be governed by the provisions of existing
legislation or in default thereof, by the rules of the law merchant.
197. Repeals. — All Acts and laws and parts thereof inconsistent
with this Act are hereby repealed.
198. Time when Act takes effect. — This Act shall take effect
ninety days after its publication in the Official Gazette of the
Philippines shall have been completed.
February 3, 1911