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107 Cards in this Set
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Negotiable Instruments
Sec. 119. Instrument; how discharged. - A negotiable instrument is discharged: |
(a) By payment in due course by or on behalf of the principal debtor;
(b) By payment in due course by the party accommodated, where the instrument is made or accepted for his accommodation; (c) By the intentional cancellation thereof by the holder; (d) By any other act which will discharge a simple contract for the payment of money; (e) When the principal debtor becomes the holder of the instrument at or after maturity in his own right. |
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Negotiable Instruments
Sec. 52. What constitutes a holder in due course. |
A holder in due course is a holder who has taken the instrument under the following conditions:
(a) That it is complete and regular upon its face; (b) That he became the holder of it before it was overdue, and without notice that it has been previously dishonored, if such was the fact; (c) That he took it in good faith and for value; (d) 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. |
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Negotiable Instruments
How is an instrument discharged |
(a) Intentionally done
(b) by the holder |
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Negotiable Instruments
Art. 1231. Obligations are extinguished: |
(1) By payment or performance:
(2) By the loss of the thing due: (3) By the condonation or remission of the debt; (4) By the confusion or merger of the rights of creditor and debtor; (5) By compensation; (6) By novation. --- (a) Annulment; (b) Rescission, (c) Fulfillment of a resolutory condition; and (d) Prescription |
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Negotiable Instruments
How is an instrument discharged by the reaquisition of the principal of his own right. |
(a) By the principal debtor;
(b) In his own right; and (d) at or after the date of maturity. |
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Negotiable Instruments
Sec. 120. When persons secondarily liable on the instrument are discharged. |
A person secondarily liable on the instrument is discharged:
(a) By any act which discharges the instrument; (b) By the intentional cancellation of his signature by the holder; (c) By the discharge of a prior party; (d) By a valid tender or payment made by a prior party; (e) By a release of the principal debtor unless the holder's right of recourse against the party secondarily liable is expressly reserved; (f) 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. |
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Negotiable Instruments
What agreements to extend the time of payment does not discharge a party secondarily liable |
(a) consented by such party
(b) holder expressly reserved his right of recourse against such party |
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Negotiable Instruments
Sec. 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: |
(a) Where it is payable to the order of a third person and has been paid by the drawer; and
(b) Where it was made or accepted for accommodation and has been paid by the party accommodated. |
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Negotiable Instruments
How is the renunciation by a holder made. |
(a) Written declaration
(b) If oral, it should be accompanied by a surrender of the instrument to the person primarily liable principal debtor (1a)Made by the holder at or after maturity (1b)Made absolutely and unconditionally secondary party (2)Made by the holder before, at or after maturity |
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Negotiable Instruments
Cancellation is inoperative if made |
(a) unintentionally
(b) by mistake or fraud OR (c) without authority |
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Negotiable Instruments
Sec. 130. When bill may be treated as promissory note. |
(a) Where in a bill the drawer and drawee are the same person or
(b) where the drawee is a fictitious person or (c) a person not having capacity to contract |
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Negotiable Instruments
Requisites of acceptance by the drawee |
(a) in writing--does not apply to 1) constructive acceptance and 2) foreign bills payable in another state unless the law of that state requires acceptance
(b) signed by the drawee (c) express a promise to pay in money (d) delivered to the holder |
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Negotiable Instruments
Sec. 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 |
(a) in favor of a person to whom it is shown and
(b) who, on the faith thereof, receives the bill for value. |
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Negotiable Instruments
Sec. 135. Promise to accept; when equivalent to acceptance. - Requisites of a promise to accept |
(a) An unconditional promise to accept a bill before it is drawn is deemed
(b) in writing and (c) receives the bill for value. |
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Negotiable Instruments
Sec. 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.
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Negotiable Instruments
When is there constructive acceptance? |
Sec 137.
(a) the drawee destroys it or (b) refuses within 24 hours after delivery or within such period as is given to him, t return the bill--accepted or not. |
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Negotiable Instruments
Sec. 138. Acceptance of incomplete bill. - A bill may be accepted |
(a) before it has been signed by the drawer, or while otherwise incomplete, or
(b) when it is overdue, or after it has been dishonored by a previous refusal to accept, or by non payment. |
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Negotiable Instruments
Sec. 139. Kinds of acceptance. - An acceptance is either |
(a) general or
(b) 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. |
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Negotiable Instruments
ec. 141. Qualified acceptance. - An acceptance is qualified which is: |
(a) Conditional; that is to say, which makes payment by the acceptor dependent on the fulfillment of a condition therein stated;
(b) Partial; that is to say, an acceptance to pay part only of the amount for which the bill is drawn; (c) Local; that is to say, an acceptance to pay only at a particular place; (d) Qualified as to time; (e) The acceptance of some, one or more of the drawees but not of all. |
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Negotiable Instruments
Sec. 143. When presentment for acceptance must be made. - Presentment for acceptance must be made: |
(a) 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
(b) Where the bill expressly stipulates that it shall be presented for acceptance; or (c) Where the bill is drawn payable elsewhere than at the residence or place of business of the drawee. |
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Negotiable Instruments
Sec. 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 |
(a) to be presented for acceptance must either present it for acceptance or
(b) negotiate it within a reasonable time. If he fails to do so, the drawer and all indorsers are discharged. |
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Negotiable Instruments
Sec. 145. Presentment; how made. - Presentment for acceptance must be |
(1) made by or on behalf of the holder
(2) at a reasonable hour, (3) on a business day and (4) before the bill is overdue, (5) to the drawee or some person authorized to accept or refuse acceptance on his behalf; and (a) 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; (b) Where the drawee is dead, presentment may be made to his personal representative; (c) 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. |
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Negotiable Instruments
Sec. 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 seventy-two and eighty-five of this Act. When Saturday is not otherwise a holiday, presentment for acceptance may be made before twelve o'clock noon on that day.
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Negotiable Instruments
Sec. 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: |
(a) Where the drawee is dead, or has absconded, or is a fictitious person or a person not having capacity to contract by bill.
(b) Where, after the exercise of reasonable diligence, presentment can not be made. (c) Where, although presentment has been irregular, acceptance has been refused on some other ground. |
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Negotiable Instruments
Sec. 149. When dishonored by nonacceptance. - A bill is dishonored by non-acceptance: |
(a) When it is duly presented for acceptance and such an acceptance as is prescribed by this Act is refused or can not be obtained; or
(b) When presentment for acceptance is excused AND the bill is not accepted. |
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Negotiable Instruments
Sec. 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 nonacceptance or he loses the right of recourse against the drawer and indorsers.
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Negotiable Instruments
Sec. 151. Rights of holder where bill not accepted. |
When a bill is dishonored by nonacceptance, an immediate right of recourse against the drawer and indorsers accrues to the holder and no presentment for payment is necessary.
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Negotiable Instruments
When is protest absolutely required |
(a) Where a foreign bill appearing on its face to be such is dishonored by nonacceptance, it must be duly protested for nonacceptance (Sec. 152)
(b) where such a bill which has not previously been dishonored by nonpayment, it must be duly protested for nonpayment (Sec. 152) (c) Before a bill can be accepted for honor, it must be protested for dishonor by non-acceptance or protested for better security (Sec. 161) (d) 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. (sec. 167) (e) When the bill is dishonored by the acceptor for honor, it must be protested for non-payment by him. (sec. 170) (f) 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. (sec. 171) (g) 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 |
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Sec. 154. Protest, by whom made. - Protest may be made by:
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(a) A notary public; or
(b) By any respectable resident of the place where the bill is dishonored, in the presence of two or more credible witnesses. |
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Negotiable Instruments
Procedure for protest |
(a) after the instrument is dishonored by non-acceptance or non-payment, the holder takes it to the notary public
(b) the notary public himself presents the instrument again (c) if refused, the notary public, on the day of dishonor, makes a minute of the dishonor or on his notarial register--noting. (d) on the same day or afterwards, the notary public extends the protest thus noted by embodying in certificate the fact of the protest, presentment, demand and in giving of notice of dishonor. Affixes his notarial seal AND (e) the notice of dishonor is sent to all the parties of the instrument |
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Negotiable Instruments
Sec. 153. Protest; how made. |
(1) The protest must be annexed to the bill or must contain a copy thereof, and
(2) must be under the hand and seal of the notary making it and (3) must specify: (a) The time and place of presentment; (b) The fact that presentment was made and the manner thereof; (c) The cause or reason for protesting the bill; (d) The demand made and the answer given, if any, or the fact that the drawee or acceptor could not be found. |
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Negotiable Instruments
Sec. 156. Protest; where made. |
General Rule: A bill must be protested at the place where it is dishonored,
Exception: When a bill drawn payable at the place of business or residence of some person other than the drawee has been dishonored by nonacceptance, 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. |
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Negotiable Instruments
Sec. 159. When protest dispensed with. |
Protest is dispensed with by any circumstances which would dispense with notice of dishonor.
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Negotiable Instruments
Sec 159. When is delay in making the protest excused. |
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. |
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Negotiable Instruments
Requisites of acceptance for honor |
a) bill must have been protested for dishonor by non-acceptance or for better security
b) the acceptor for honor must not be a party already liable thereon--stranger c) bill must not be overdue at the time of the acceptance for honor d) with the consent of the holder of the instrument |
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Negotiable Instruments
Sec. 162 Formal requisites of acceptance for honor. |
a) acceptance for honor must be in writing
b) indicate that it is an acceptance for honor c) signed by the acceptor for honor d) it must contain an express or implied promise to pay (Sec. 132) and e) the accepted bill for honor must be delivered to the holder (ibid.) f) acceptor for honor must appear before a notary public and declare his intention to accept (Gazzem v. Armstrong) |
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Negotiable Instruments
Acceptance for honor is for the honor of |
a) any party liable for the bill of exchange or
b) person for whose account the bill is drawn. |
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Negotiable Instruments
An acceptance for honor binds himself to pay according to the terms of his acceptance provided |
a) bill has been duly presented for payment
b) not paid by the drawer c) protested for non-payment d) notice is given to him supra protest |
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Negotiable Instruments
Sec. 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.
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Negotiable Instruments
Sec. 168. Presentment for payment to acceptor for honor, how made. - Presentment for payment to the acceptor for honor must be made as follows: |
(a) 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 its maturity.
(b) 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 one hundred and four. |
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Negotiable Instruments
Sec. 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 of exchange.
3 protests (a) protest for dishonor by non-acceptance or for better security (b) protest for non-payment by the drawee in order to hold the acceptor for honor liable (c) protest for non-payment by the acceptor for honor in order to hold the drawer and indorsers liable |
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Negotiable Instruments
Who may make a payment for honor |
(a) party to the bill or
(b) stranger |
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Negotiable Instruments
Requisites of a valid payment for honor |
a) bill has been previously dishonored
b) protested for non-payment c) payment supra protest made by any person even a party thereto d) payment is attested by a notarial act of honor w/c must be appended to the protest or form an extension of it e) notarial act must be based on the declaration made by the payer for honor or his agent of his intention to pay the bill for honor and for whose honor he pays |
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Negotiable Instruments
Procedure for Payment for honor |
a) payer for honor goes to a notary public after the bill has been noted or protested for non-payment and declares his intention to pay the bill for honor and whose honor he pays
b) declaration is recorded by the notary public either in the protest itself or an extension of it or in a separate paper attached thereto c) payer for honor notifies within a reasonable time for whose honor he pays that he will make the payment |
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Negotiable Instruments
Sec. 175. Effect on subsequent parties where bill is paid for honor. - Where a bill has been paid for honor, |
(a) all parties subsequent to the party for whose honor it is paid are discharged but
(b) 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. |
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Negotiable Instruments
Sec. 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 |
(a) the bill itself and
(b) the protest. |
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Negotiable Instruements
2 distinctive characteristics of a check |
(a) drawn on a bank
(b) payable on demand |
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Negotiable Instruements
What is a check by a bank |
draft
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Negotiable Instruements
When does a check produce the effect of payment |
(a) when it has been encashed or
(b) impaired through the fault of the creditor |
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Negotiable Instruements
Bills payable in the future |
(a) those bearing the date of their issuance but directing payment on a specified date in the future and
(b) postdated check or those bearing a date subsequent to their delivery and specifying no time of payment |
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Negotiable Instruments
2 types of crossed checks |
(a) Special - drawee bank must pay check only upon presentment by such bank or company
(b) General - Check can only be deposited in the payee's bank |
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Negotiable Instruments
Requisites in order that the drawer may be discharged from liability |
(a) check is not presented within a reasonable time after its issue
(b) drawer suffers loss (c) loss is attributable to delay |
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Negotiable Instruments
Form of certification |
(a) in writing or
(b) on a separate note |
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Negotiable Instruments
Effects of certification |
(a) equivalent to acceptance
(b) discharges persons secondarily liable if procured by holder (c) assignment of funds of the drawer in the hands of the drawee (d) payee or holder becomes the depositor (e) bank becomes the primary debtor and cannot refuse to pay it (e) drawer may not issue a stop payment order on the certified check |
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Negotiable Instruments
When may a check be certified |
A check cannot be certified before it is payable
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Negotiable Instruments
Can there be an implied acceptance by the bank |
Yes. (Sumacad v. Province of Samar)
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Negotiable Instruments
What is the Associated Bank doctrine |
To simplify the proceedings, the payee of an illegally encashed checks was allowed to recover directly from the collecting bank regardless of whether or not the checks were delivered to the payee
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Negotiable Instruments
Causes when a bank may refuse payment |
(a) bank is insolvent
(b) drawer's deposit is insufficient or he has no account or said account has been closed or garnished (c) drawer is insolvent and proper notice is received by the bank (d) the drawer dies and proper notice is received by the bank (e) the drawer has countermanded payment (f) the holder refuses to identify himself (g)the bank has reason to believe that the check is forgery (h) the check is stale or postdated |
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Negotiable Instruments
Sec. 52. What constitutes a holder in due course. |
A holder in due course is a holder who has taken the instrument under the following conditions:
(a) That it is complete and regular upon its face; (b) That he became the holder of it before it was overdue, and without notice that it has been previously dishonored, if such was the fact; (c) That he took it in good faith and for value; (d) 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. |
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Negotiable Instruments
The title of a person who negotiates an instrument is defective under Section 55 in two ways, to wit: |
(a) in the acquisition - obtained the instrument or any signature thereto by fraud, duress, force and fear or other unlawful means, or for an illegal consideration
(b) in the negotiation - he negotiates the instrument in breach of faith or under such circumstance as amount to fraud |
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Negotiable Instruments
Rights of a holder in due course |
(a) sue on the instrument in his own name (sec. 51)
(b) receive payment and if the payment is in due course, the instrument is discharged (c) holds the instrument free from any defect of title of prior parties (d) he holds the instrument free from defenses available to prior parties among themselves (e) he may enforce payment of the instrument for the full amount thereof against all parties liable thereon (sec. 54) |
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Negotiable Instruments
examples of real defenses |
(a) incapacity as far as the incapacitated person is concerned
(b) illegality of the contract when declared by law except when the maker or drawer is part of the illegality (c) want of delivery of incomplete instrument (sec. 15) (d) forgery (sec. 23) (e) want of authority--apparent and real (f) duress amounting to forgery (g) fraud in factum or in fraud in esse contractus (sec. 14) (h) fraudulent alteration by holder (sec 124, 1st par of section 125) (i) prescription (j) other infirmities appearing on the face of the instrument (sec 52) (k) discharge at or after maturity (sec 88, 118, 121, 122) |
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Negotiable Instruments
example of personal defenses |
(a) filling of wrong date (sec. 13)
(b) filling up of blanks not in accordance with authority given and within reasonable time (sec 28) (c) want of delivery of complete instrument (d) absence or failure of consideration (sec 28) (e) simple fraud or fraud in inducement (sec 55) (f) acquisition of instrument (not signature) by duress, force or fear (ibid.) (g) acquisition of instrument by unlawful means (ibid.) (h) acquisition of means for an illegal consideration (ibid.) (i) negotiation of breach of faith (ibid) (j) negotiation under circumstances that amounts to fraud (k) innocent alteration or spoilation (sec 124, last par of 125) (l) set-off between immediate parties (sec 58) (m) discharge by payment or renunciation or release before maturity (sec 50, 121, 122) (n) discharge of party secondarily liable by discharge of prior party (sec 20[c]) (o) usury (p) want of authority but agent has apparent authority |
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Negotiable Instruments
type of parties |
(a) immediate parties
(b) remote parties (c) prior parties |
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Negotiable Instruments
rights of a holder not in due course |
(a) sue on the instrument in his own name (sec. 51)
(b) receive payment and if the payment is in due course, the instrument is discharged (ibid.) (c) he is entitled to the instrument but holds it subject to the same defense as if it were non-negotiable (sec. 58) (d) he has all the rights of a holder in due course from whom he derives his title in respect of all parties prior to such holder, provided he is not himself party to any fraud or illegality of the instrument (ibid.) |
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Negotiable Instruments
requisites of the shelter theory |
(a) he derives his title through a holder in due course
(b) not himself a party to any fraud or illegality affecting the instrument |
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Negotiable Instruments
liability of parties |
(a) primarily liable--maker of the promissory note, acceptor of a bill of exchange, certifier or checker
(b) secondarily liable--drawer and indersers (c) not liable--drawee until he accepts in which he becomes an acceptor |
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Negotiable Instruments
secondary party undertakes to pay the instrument only after certains conditions have been fulfilled |
(a) due presentment for payment or acceptance to primary party (sec. 70)
(b) dishonor by such party (sec 184 and 151) (c) taking of proceedings required by law after dishonor |
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Negotiable Instruments
necessary proceedings of dishonor are duly taken |
(a) notice of dishonor is given to the drawer (sec 89) subject to certain exceptions (sec 114)
(b) in case of foreign bills, protest is made followed by a notice of protest (sec 152) |
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Negotiable Instruments
the drawer engages to pay after certain conditions are complied with, to wit: |
(a) the bill is presented for acceptance
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Negotiable Instruments
Sec. 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: |
(a) The existence of the drawer, the genuineness of his signature, and his capacity and authority to draw the instrument; and
(b) The existence of the payee and his then capacity to indorse. |
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Negotiable Instruments
who is an irregular indorser |
(a) not otherwise a party to an instrument
(b) places thereon his signature in blank (c) before delivery |
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Negotiable Instruments
Sec. 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: |
(a) If the instrument is payable to the order of a third person, he is liable to the payee and to all subsequent parties.
(b) 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. (c) If he signs for the accommodation of the payee, he is liable to all parties subsequent to the payee. |
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Negotiable Instruments
Sec. 65. Warranty where negotiation by delivery and so forth. — Every person negotiating an instrument by delivery or by a qualified indorsement warrants: |
(a) That the instrument is genuine and in all respects what it purports to be;
(b) That he has a good title to it; (c) That all prior parties had capacity to contract; (d) That he has no knowledge of any fact which would impair the validity of the instrument or render it valueless. But when the negotiation is by delivery only, the warranty extends in favor of no holder other than the immediate transferee. The provisions of subdivision (c) of this section do not apply to a person negotiating public or corporation securities other than bills and notes. |
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Negotiable Instruments
Sec. 66. Liability of general indorser. - Every indorser who indorses without qualification, warrants to all subsequent holders in due course: |
(a) The matters and things mentioned in subdivisions (a), (b), and (c) of the next preceding section; and
(b) That the instrument is, at the time of his indorsement, valid and subsisting; And, 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 pay it. |
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Negotiable Instruments
Personal liability of an agent or broker |
(a) an agent or broker who negotiates by mere deliver--bearer instrument--incurs the liabilities prescribed in section 65
(b) if he negotiates the instrument by qualified indorsement, his warranties are those of section 65 and if by general indorsement, those stated in section 66. |
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Negotiable Instruments
To escape personal liability, the agent or broker must disclose |
(a) the principal and
(b) the fact that he is only acting as an agent |
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Negotiable Instruments
Sec. 72. What constitutes a sufficient presentment. - Presentment for payment, to be sufficient, must be made: |
(a) By the holder, or by some person authorized to receive payment on his behalf;
(b) At a reasonable hour on a business day; (c) At a proper place as herein defined; (d) 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. |
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Negotiable Instruments
When must presentment be made |
(a) if payable at a bank, during banking hours
(b) if presented at a place of business, it must be made during the usual business hours of the place (c) if presented at the residence of the person liable to pay, it must be made between the usual hours of rising and retiring |
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Negotiable Instruments
Sec. 73. Place of presentment. - Presentment for payment is made at the proper place: |
(a) Where a place of payment is specified in the instrument and it is there presented;
(b) 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 presented; (c) 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; (d) 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 or residence. |
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Negotiable Instruments
When presentment not required. |
(a) 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. (sec. 79)
(b) 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 presented. (sec. 80) (c) When presentment is dispensed with under sec. 82 (d) When the bill has been dishonored by non-acceptance (sec. 151) (e) When the principal debtor is dead (sec. 76) |
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Sec. 83. When instrument dishonored by non-payment. - The instrument is dishonored by non-payment when:
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(a) It is duly presented for payment and payment is refused or cannot be obtained; or
(b) Presentment is excused and the instrument is overdue and unpaid. |
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Negotiable Instruments
Sec. 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.
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Negotiable Instruments
Sec. 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;
(b) Where the drawee is a fictitious person; (c) By waiver of presentment, express or implied. |
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Negotiable Instruments
Requisites of non-payment upon due presentation |
(a) that the instrument is duly presented
(b) to the person primarily liable (c) the payment is either refused or cannot be obtained |
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Negotiable Instruments
Requirements of non-payment without due presentation |
(a) presentment is excused (sec/ 79, 80, and 82)
(b) instrument is overdue (sec. 85, 86 and 194) (c) it is unpaid |
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Negotiable Instruments
Sec. 88. What constitutes payment in due course. - Payment is made in due course when |
(a) it is made at or after the maturity
(b) payment is made to the holder thereof (c) payment is made in good faith and without notice that his title is defective. |
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Negotiable Instruments
A negotiable instrument is considered to be dishonored |
(a) if it is not accepted when presented for acceptance
(b) if it is not paid when presented for payment at maturity (c) if the presentment is excused or waived and the instrument is past due and unpaid |
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Negotiable Instruments
Who are entitled to a notice of dishonor |
(a) drawer
(b) indorsers (c) their agents |
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Negotiable Instruments
Sec. 90. By whom given. - The notice may be given |
(a) by the holder, or
(b) another in behalf of the holder (c) another 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. (c) another person on behalf of such party |
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Negotiable Instruments
Sec. 92. Effect of notice on behalf of holder. - Where notice is given by or on behalf of the holder, it inures to the benefit of |
(a) all subsequent holders and all prior parties who has given notice
(b) all parties prior to the holder but subsequent to the party whom notice has been given and against whom they have a right of recourse |
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Negotiable Instruments
To whom may an agent give notice |
(a) parties secondarily liable
(b) principal |
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Negotiable Instruments
Whether written or oral, the notice must set forth |
(a) identity of the instrument
(b) the fact that it has been dishonored by non-acceptance or non-payment (c) a statement that the party giving notice intends to look to the party addressed for payment |
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Negotiable Instruments
Notice of dishonor may be given by |
(a) personal delivery
(b) mail |
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Negotiable Instruments
When the party sought to be charged is dead, the notice must be given to his personal representative provided that: |
(a) his death is known to the party giving the notice
(b) there is a personal representative (c) said personal representative can be found with reasonable diligence |
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Negotiable Instruments
In case the party sought to be charged is dead, notice to his personal representative is not required if: |
(a) death is not known to the party giving the notice
(b) although the fact of death is known, he has no personal representative (c) there is a personal representative but he cannot be found with reasonable diligence |
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Negotiable Instruments
Notice must be given to joint accomodation indorsers unless |
(a) they are partners or
(b) one of them has authority to receive such notice from the others |
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Negotiable Instruments
Sec. 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: |
(a) 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 following.
(b) If given at his residence, it must be given before the usual hours of rest on the day following. (c) If sent by mail, it must be deposited in the post office in time to reach him in usual course on the day following. |
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Negotiable Instruments
Sec. 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: |
(a) 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 last day, by the next mail thereafter.
(b) If given otherwise than through the post office, 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. |
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Negotiable Instruments
Notice by mail is deemed to have been properly made where |
(a) the notice of dishonor is duly addressed AND
(b) deposited in the post office |
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Negotiable Instruments
Section 106 defines the act of depositing in the post office. The notice may be deposited in |
(a) the post office
(b) any branch post office (c) any letter box under the control of the post office |
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Negotiable Instruments
ec. 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: |
(a) Either to the post-office nearest to his place of residence or to the post-office where he is accustomed to receive his letters; or
(b) If he lives in one place and has his place of business in another, notice may be sent to either place; or (c) If he is sojourning in another place, notice may be sent to the place where he is so sojourning. |
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Negotiable Instruments
When may waiver be made |
(a) before the time of giving notice
(b) after omission to give notice |
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Negotiable Instruments
As to who are affected by an express waiver depends on where the waiver is written |
(a) if the waiver is embodied in the instrument itself, it binds all parties
(b) if it is written above the signature of the endorser, it binds only him |
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Negotiable Instruments
Where protest is waived, the following are also deemed waived |
(a) presentment AND
(b) notice of dishonor |
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Negotiable Instruments
Sec. 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: |
(a) Where the drawer and drawee are the same person;
(b) When the drawee is fictitious person or a person not having capacity to contract; (c) When the drawer is the person to whom the instrument is presented for payment; (d) Where the drawer has no right to expect or require that the drawee or acceptor will honor the instrument; (e) Where the drawer has countermanded payment. |
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Negotiable Instruments
Sec. 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: |
(a) When the drawee is a fictitious person or person not having capacity to contract, and the indorser was aware of that fact at the time he indorsed the instrument;
(b) Where the indorser is the person to whom the instrument is presented for payment; (c) Where the instrument was made or accepted for his accommodation. |
