SEC. 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 INDORSE. The maker and acceptor are primarily liable, while the drawer and indorser are secondarily liable and their liability is contingent upon certain steps taken, such as presentment for acceptance of payment, and notice of dishonor upon them. Sec. 192 provides who are primarily and secondarily liable on the instrument. It provides, 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. The primary liability stems from the terms of the instrument and is not dependent on any procedure that may be taken to hold them as such. Persons secondarily liable are those whose liability on the instrument requires application to other persons for acceptance or payment and compliance with certain procedure. Those who are primarily liable are the makers of promissory notes and acceptors of bills and checks. Those secondarily liable are the drawers of bills and checks, and indorsers of bills, checks and notes. For instance, an accommodation party is a surety for the maker or for any other party who lends his name and credit to the latter, without receiving any consideration. Since the NIL is silent on the liabilities of a surety or a guarantor, the pertinent provisions of the Civil Code on the matter will govern. Liability of maker o The note may be signed by two or more persons as makers, and the makers are jointly and severally liable therefor. o In the absence of ambiguity in the note, the person who signs as maker thereof cannot show by parol evidence as against the payee for value that he intended to be bound otherwise or in a different capacity. The maker is presumed to have signed the note with full awareness and knowledge of the contents thereof, and in the absence of fraud, the instrument must be given its legal effect. o By making the instrument, the maker not only aggress to pay it according to its tenor, but also admits the existence of the payee and his capacity to indorse. In other words, the fact that the payee is fictitious or is a minor or lacks the capacity to contract is waived and the maker is estopped by his written representation to claim that the payee is non-existent or the corporate payee is a foreign corporation not duly licensed to do business or is not duly licensed to do business or is not duly registered. Or has no capacity to indorse, to defeat the action by an indorsee for value against him on the instrument. o Sec 22 of the NIL provides that the indorsement or assignment of the instrument by a corporation or by an infant passes the property therein, notwithstanding that from want of capacity, the corporation or infant may incur no liability to the indorsee of the minor or of the corporation even if its act is regarded as ultra vires.

SEC. 61 LIABILITY OF DRAWER. THE DRAWER BY DRAWING THE INSTRUMENT ADMITS THE EXISTENCE OF THE PAYEE AND HIS THEN CAPACITY TO INDORSEE; 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. A drawer and a maker differ from each other, except that both admit the existence of the payee and his then capacity to indorse. o (1) The drawer draws a bill of exchange, while the maker makes a promissory note. o (2) The maker of a promissory note is primarily liable on the instrument, while a drawer is secondarily liable and becomes primarily liable only when three conditions are complied with, namely: Presentment of the bill for acceptance or payment Dishonor by non-payment or non-acceptance Notice of dishonor o (3) A drawer may state in the instrument an express stipulation negativing or limiting his own liability to the holder, by inserting the words without recourse or words of similar import. o (4) The maker cannot unilaterally countermand a note, without rescinding the note, while a drawer may do so under certain circumstances Stop payment or countermand

As a rule, the drawer of a bill may issue a stop payment or countermand order to the drawee before acceptance or payment. Where payment has been stopped, the drawer still remains liable on the instrument unless he can show valid defense to prevent the payee from recovery. Where a stop payment or countermand is issued by the drawer before the acceptance or payment of the instrument by the drawee, the drawee has the right to refuse or deny payment on the check, and the payee has no cause of action against the drawee. However, if the notice of stop payment or countermand is issued and received by the drawee after it has accepted the bill or after it has paid the same, problems of liability will arise between the drawer and the drawee or between the payee, the drawer and the drawee, and as who may ultimately be held liable as the reason or reasons for stopping payment, the terms of the contract, express or implied, between the drawer and the drawee, in light of the statutory or contractual obligations of each party. If the drawee banks pays a check to the payee, even after it has received a stop payment order from the drawer or depositor, the bank cannot seek reimbursement from the drawer nor debit the latters account with it, for by proceeding to pay notwithstanding receipt of the stop payment order, the drawee violated its contract with the drawer, which is that of debtor and creditor. It gas been held that the drawee bank, in such a situation, cannot recover on the check from the payee of the check.

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 The acceptance makes the acceptor a party thereto and is thus primarily bound thereby. Until such acceptance, the acceptor is not liable therefor. The drawee by acceptance becomes liable to the payee or his indorsee, and also to the drawer himself. But the drawer and acceptor are the immediate parties to the consideration, and if the acceptance be without consideration, the drawer cannot recover of the acceptor. The payee holds a different relation; he is a stranger to the transaction between the drawer and the acceptor, and is, therefore, in a legal sense a remote party. In a suit by him against the acceptor, the question as to the consideration between the drawer and the acceptor cannot be inquired into. The payee or holder gives value to the drawer, and if he is ignorant of the equities between the drawer and the acceptor, he is in the position of a bona fide indorsee. Hence, it is no defense to a suit against the acceptor of a draft which has been discounted, and upon which money has been advanced by the plaintiff, that the draft was accepted for the accommodation of the drawer. If a drawee bank pays a forged check which was previously accepted or certified by the said bank, it cannot recover from a holder who did not participate in the forgery and did not have actual notice thereof. Presentment for payment is a demand for payment of the instrument, accompanied by the production of the instrument, upon the drawee or upon the acceptor or the maker of a promissory, for payment thereof, they being the parties primarily liable thereon. The acceptance of a bill is the signification by the drawee of his assent to the order of the drawer, which, in the case of checks, is the payment, on demand, of a given sum of money while actual payment of the amount of the check implies not only an assent to said order of the drawer and a recognition of the drawers obligation to pay the aforesaid sum, but also a compliance with such obligation. On the other hand, payment means the discharge of an obligation. In the absence of an agreement, either express or implied, payment means the discharge of a debt or obligation in money and unless the parties so agree, a debtor has no rights, except at his own peril, to substitute something in lieu of cash as medium of payment of his debt. The phrase according to the tenor of his acceptance, has been construed as referring to the instrument as it was at the time it came into the hands of the acceptor for acceptance for he accepts no other instrument than the one presented to him the altered form and it is alone he engages to pay. It makes for the usefulness and currency of negotiable paper without seriously endangering accepted banking practices, for banking institutions can readily protect themselves against liability on altered instruments by qualifying their acceptance or certification. Sec 62 implies that the acceptor may accept the instrument, subject to a condition or qualification, to protect him against liability on a forged instrument. He may accept the

instrument with qualification. Thus, he may write: Accepted, pro vided that the instrument is genuine or all signatures therein are not forged. If he accepts it with such qualification, he can raise the defense of forgery by prior parties to defeat recovery on the instrument against him. If he accepts it without qualification, it is a promise on his part to pay according to the tenor of the instrument, as presented to him, in which case his undertaking in unqualified and he is liable even if the instrument was altered or forged, at the time it was presented for his acceptance, except as against the party who forges the signature as he cannot be permitted to base his claim on his forged signature. The presumption is that the drawer has funds in the hands of the drawee or acceptor against which the instrument, which the latter has accepted can be drawn. However, the fact that the drawer has no funds in the hands of the drawee does not relieve the latter from liability on the accepted instrument, for he could be an accommodation drawee for the benefit of the drawer. But if the drawer has no sufficient funds in the hands of the drawee, payment by the latter entitles him to seek reimbursement from the drawer for what he had paid on the accepted instrument.

SEC. 63 WHEN A PERSON DEEMED INDORSER. A PERSON PLACING HIS SIGNATURE UPON AN INSTRUMENT OTHERWISE THAN AS MAKER, DRAWER, OR ACCEPTOR, IS DEEMED TO BE INDORSER UNLESS HE CLEARLY INDICATES BY APPROPRIATE WORDS HIS INTENTION TO BE BOUND IN SOME OTHER CAPACITY. 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 FF 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. 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. 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. Every indorser is liable to the holder for breach of his obligation to the latter, and if the holder elects to demand payment from him, he must pay his obligation and look to prior indorsers for repayment of the amount due on the note. An accommodation indorser who endorses the instrument without qualification is also considered a general indorser, liable on the instrument to a holder for value, notwithstanding that such holder at the time of taking the instrument knew him to be only an accommodation party. The accommodation party is liable to a holder for value as if the contract was not for accommodation. It is not a valid defense that the accommodation party did not receive any valuable consideration when he executed the

instrument. Nor is it correct to say that the holder for value is not a holder in due course merely bec at the time he acquired the instrument he knew that the indorser was only an accommodation party. Effect of guaranteeing all prior endorsements o A drawee bank, or the collecting bank, is required by the clearing house rules, of which it is a member, to stamp checks presented to it for payment, the ff words: all prior endorsements and/or lack of endorsements guaranteed. By making such endorsements, the collecting bank is considered an endorser and is liable as such, and the check, even if non-negotiable, is considered negotiable by the doctrine of estoppel. o By stamping a check with the words all prior endorsements and/or lack of endorsements guaranteed, the drawee bank made the assurance that it had ascertained the genuineness of all prior endorsements, treated the check as negotiable, and assumed the warranty of the endorser. If the endorsement happens to be forged, the drawee bank is liable on the check in favor of the payee or person entitled thereto. The weight of authority is that the possession of a check on a forged or unauthorized endorsement is wrongful and when the money is collected on the check, the bank can be held for moneys had and received. The proceeds are held for the rightful owner of the payment and may be recovered by him. The position of the bank taking the check on the forged or unauthorized endorsements is the same as if it had taken the check and collected without indorsements at all. The act of the bank amounts to conversion of the check. To simplify proceedings, the payee of the illegally encashed check should be allowed to recover directly from the bank responsible for such encashment regardless of whether or not the check was actually delivered to the payee.

SEC. 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. SEC. 68 ORDER IN WHICH INDORSERS ARE LIABLE. AS RESPECT TO 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 SEVERALLY. SEC. 69 LIABILITY OF AN AGNT OR BROKER. WHERE A BROKER OR OTHER AGENT NEGOTIATES AN INSTRUMENT WITHOUT INDORSEMENT, HE INCURS ALL THE LIABILITIES PRESCRUBED BY SEC 65 OF THIS ACT, UNLESS HE DISCLOSES THE NAME OF HIS PRINCIPAL AND THE FACT THAT HE IS ACTING ONLY AS AGENT.

ENFORCEMENT OF LIABILITY
PRESENTMENT FOR PAYMENT
SEC. 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 LIABILITY 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 INDORSER. Steps in a promissory note in order to charge the indorser are: Presentment for payment must be made within the required period to the maker Notice of dishonor should be given, if promissory note is dishonored by non-payment by the maker Steps in Bill of Exchange Presentment for acceptance or negotiation within a reasonable time after it was acquired should be made only in the ff instances: Where the bill is payable after sight or in any other case, where presentment for acceptance is necessary in order to fix the maturity date of the instrument Where the bill expressly stipulates that it shall be presented for acceptance Where the bull is drawn payable elsewhere than at the residence or place of business of the drawee If dishonored by non-acceptance:

Notice of dishonor should be given to the indorsers and drawers If the bill is a foreign bill, there must be protest for dishonor by non-acceptance If the bill is accepted: Presentment for payment to the acceptor should be made If the bill is dishonored upon presentment for payment: Notice of dishonor must be given to person secondarily liable If the bill is a foreign bill, protest for dishonor by non-acceptance must be made Presentment for payment is the presentation of the instrument for payment of the face value thereof. It is a demand for payment is excused or is not necessary, presentment for payment is mandatory. It is a demand for payment of the instrument, accompanied by the production of the instrument, upon the drawee or upon the acceptor or the maker of a promissory note, for payment thereof. Sec. 70 requires that as a rule, the presentation of the instrument for payment is necessary in order to charge the drawer and indorsers, they being secondarily liable. If not presented for payment at a special place, the person primarily liable is still liable for the value of the instrument, the only effect of non-presentment at the specified place is to relieve the maker from liability for costs and attorneys fees.

SEC. 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, EXCEPT THAT 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. It has been held that the burden is on the holder to prove presentment within a reasonable time, and the defendant indorser need not plead failure to make due presentment, although it is also held in a case that Sec 71 is in effect a statute of limitations, and the burden was upon the indorser of a demand note to plead and prove that the presentment was unreasonably delayed. (Sec. 72) To constitute sufficient payment, the ff must be present: Presentment must be made by the holder or by some person authorized to receive payment on his behalf It must be made at a reasonable hour on a business day on the proper date Presentment must be at the proper place Presentment must be to the person primarily liable on the instrument, or if he is absent or inaccessible, to any person found at the place where presentment is made The person entitled to present the instrument for payment must exhibit the instrument to the person from whom the instrument is demanded and upon payment must be delivered to the person paying it If the instrument is payable on demand, presentment must be made within a reasonable time after its issue, except in the case of a bill of exchange, presentment will be sufficient if made within a reasonable time after the last negotiation thereof. Reasonable time: So much time as is necessary under the circumstances for a reasonably prudent and diligent man to do, conveniently, what the contract or duty requires should be done, having a regard for the rights and possibility of loss, if any to the other party. Regard is to be had as to the nature of the instrument, the usage of trade or business with respect to such instruments, and the facts of the particular case. The test is whether the payee employed such diligence as a prudent man exercises in his own affairs. Where the instrument is payable at the 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 w/c case presentment at any hour before the bank is closed on that day is sufficient. Presentment must be made by the holder. It may also be presented by the person authorized by the holder to receive payment on his behalf. The authorization must be in writing, otherwise, the payee may refuse payment, and must have in him the instrument for exhibition and delivery to the party paying it. Where a check is crossed specially to a specified or named bank, it should be presented by the latter by depositing it to his account, and not in any other person, otherwise, the presentment is not effective and the liability of the drawer would not attach.

SEC. 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 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 Place of payment a house, bank, counting room, store or place of business, where the holder can present a note, where the maker can deposit or provide funds to meet it, and where a legal offer to pay can be made. Designation of a town or city is not sufficient. A. B.

SEC. 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. If the instrument is not surrendered and cancelled, there is a danger that it may fall in the hands other persons who might claim rights over the instrument. In Asaldo v. CA, the SC stated that even if the rule is that the instrument must be exhibited to determine its genuineness, this is rendered unnecessary not only by the omission to contest it, but also by the admission of the authenticity of the note implicit from the averment that substantial payment were made thereon and by the express waiver of demand, payments, protest and notice of protest and non-payment in the note. In Far East Bank v. Queremit, the court declared that a bank that pays a certificate of time deposit without requiring the surrender of the certificate does so at its own peril. The purpose of Sec 74 are: To give the maker or the party against whom payment is demanded to determine the genuineness of the instrument or the indorsement thereon and, after payment, To have the paying party written evidence of payment and protection against further transfer of said instrument. However, these are rights of the paying party, which he may waive, such as by not asking the instrument to be exhibited and delivered, or by failing to raise it as a defense or by admission of the authenticity of the instrument, or by waiving demand, presentment, protest and notice of protest and non-payment. If he waives such right and the person to whom payment is made turns out to be unauthorized or not entitled to payment, the drawee may be held liable therefor. SEC. 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. Usual banking hours is from 9 to 3, Monday to Friday. The exception is when the person to make payment has no funds in the bank, in which case presentment may be at any hour before 3 pm, so as to give the drawer the opportunity to deposit funds prior to such hour. SEC. 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. If there is an estate proceeding, the personal representative is the administrator or administratrix. If none, the personal representative is the heir or the heirs of the deceased. SEC. 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 ONE OF THEM, EVEN THOUGH THERE HAS BEEN A DISSOLUTION OF THE FIRM. SEC. 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 THEM ALL. SEC. 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. Where the drawer has insufficient funds in the bank to pay the check or where he has closed his account therewith, he has no right to expect or require that the drawee bank or acceptor will pay the instrument. In such case, presentment by the holder is not required to charge the drawer and he can immediately hold the latter liable thereon. SEC. 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 PRESENTED. 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. WHEN THE CAUSE OF THE DELAY CEASES TO OPERATE, PRESENTMENT MUST BE MADE WITH REASONABLE DILIGENCE.

SEC. 82 A. B. C. -

WHEN PRESENTMENT FOR PAYMENT IS EXCUSED. PRESENTMENT FOR PAYMENT IS EXCUSED: 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, EXPRESS OR IMPLIED. It has been held that non-presentment will not relieve the drawer from his liability but would only discharge him from liability to the extent of the loss caused by the delay or non-presentment.

In International Corporate Bank v. Sps Gueco, the court ruled: Even assuming that presentment is needed, failure to present for payment within a reasonable time will result to the discharge of the drawer only to the extent of the loss caused by the delay. Failure to present on time, this, does not totally wipe out all liability. In fact, the legal situation amounts to an acknowledgment of liability in the sum stated in the check. In this case, the Gueco spouses have not alleged, much less shown that they or the bank which issued the managers check has suffered damage or loss caused by the delay or non-presentment. Definitely, the original obligation to pay certainly has not been erased.

SEC. 83 WHEN INSTRUMENT DISHONOTED BY NON-PAYMENT. THE INSTRUMENT IS DISHONORED BY NONPAYMENT WHEN: 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. SEC. 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. SEC. 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 ON OR BECOMING PAYABLE ON SATURDAY ARE TO BE PRESENTED FOR PAYMENT ON THE NEXT SUCCEEDING BUSINESS DAY EXCEPT THAT INSTRUMENTS PAYABLE ON DEMAND MAY, AT THE OPTION OF THE HOLDER, BE PRESENTED FOR PAYMENT BEFORE TWELVE OCLOCK NOON ON SATURDAY WHEN THAT ENTIRE DAY IS NOT A HOLIDAY. SEC. 86 TIME: HOW COMPUTED. WHEN THE INSTRUMENT IS PAYABLE AT A FIXED PERIOD AFTER DATE, AFTER SIGHT, OR AFTER THAT HAPPENDING 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. SEC. 87 RULE WHERE INSTRUMENT IS 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. Similarly, Sec 187 of the NIL provides that a check of itself does not operate as 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 the check. SEC. 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. If the holder or indorseee does not present the instrument for payment at all or does after an unreasonable period, the indorser is discharged from liability, whether or not he is injured by the delay. Unless the holder can show that delay in making presentment for payment is excused or nonpresentment for payment is excused, the holder has no cause of action against the indorser bec he is relieved from liability thereon for the unreasonable delay in the presentment from payment of the instrument. The unreasonable delay is similar to exctinctive prescription of a cause of action which, if evident from the allegations of the complaint, may be raised any time. It was held in Far East Realty Investment Inc. v. CA, Likewise, presentment for payment is not required in order to charge the drawer, and that notice of dishonor is not required to be given to the drawer where he has no right to expect or require that the drawee or acceptor will pay or honor the instrument. Therefore, where presentment for payment and notice of dishonor are not necessary as when funds are insufficient to meet a check, the drawer is liable, whether such presentment and notice be totally omitted or merely delayed. However, in situation where the presentment and notice is required to be made without unreasonable delay, the drawer is discharged pro tanto or only to the degree of loss suffered by reason of delay. Since the discharge is the exception to the general rule, the loss must be proven by the drawer. The drawer in the instant case has not presented in evidence any loss which he may have suffered by reason of the delay. As a rule, delay in the presentation of a check for payment does not discharge the drawer, except to the extent of the loss caused thereby. Thus, the rule is that although the drawer of a check is discharged only to the extent of loss caused by unreasonable delay in presentment, so that the absence of loss does not discharge the drawer for any length of delay, an indorser is wholly discharged thereby irrespective of any question of loss or injury or whether or not loss is caused by the delay. The reason for the difference between the liability of the indorser and that of the drawer in case of dishonor is that the drawer is not probably or necessarily prejudiced thereby, while an indorser is, actually or by legal presumption. If the debt remains unpaid, the fact that the check had become stale bec it was not presented for payment within 6 months from issue does not relieve the drawer from payment of the debt; it merely destroys its negotiability but it still remains an evidence of debt, and the debtor is still liable to pay the same to the creditor, except when such debt has been extinguished by any of the modes of extinguishing an obligation under the NCC.

NOTICE OF DISHONOR
SEC. 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. Accdg to Sec 83, the notice may be given 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 notice is given. 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. If the notice is given by the indorser who may be compelled to pay, such notice inures to the benefit of the holder and all the parties subsequent to the party to whom notice is given. Thus, of M, the maker dishonors the instrument, D, the holder may notify C (the immediate transferee of D) since C may be compelled to pay D. C in turn may notify person who may be secondarily liable to him, B, A, and the payee P. B may notify A and P and A may notify P. If D gave notice of dishonor to P, A, B and C, the latter C need not notify P, A and B again because notice by the holder inures to the benefit of all prior parties who have the right of recourse against the party to whom it is given. On the other hand, if D notified C only, but C in turn, notified P, A, and B, D can already hold P, A and B liable because notice by an indorser inures to the benefit of the holder. Additionally, P need not notify A and B anew bec the notice given by C inures to the benefit of all parties subsequent to the party to whom notice is given. Notice of dishonor means simply bringing to the knowledge of the drawer or indorser of the instrument, either verbally or in writing, the fact that a specified instrument, upon proceedings taken, has not been accepted or has not been paid, and that the party notified of the dishonor is expected to pay it. Under BP 22, the notice of dishonor must be in writing. Verbal notice here is not effective. In the case of assignment of check, the assignor is not released from liability for lack of notice of dishonor to him bec his liability arises from breach of the assignment and not from the dishonor of the check. Sec 186 of the NIL provides that the drawer will be discharged from liability on the check to the extent of loss caused by the delay in presenting it for payment within a reasonable time after its issue. It is different as to indorsers bec it has been held that unreasonable delay in giving notice of dishonor of a check will discharge the indorser whether such delay causes loss to him or not. Thus, if sued, the drawer must not only prove unreasonable delay in giving notice of dishonor but also that the delay caused him loss or damage, to be absolved from liability to the extent or loss. For indorsers, they must show only that there was unreasonable delay in giving notice. The fact that a check has become stale does not mean that the drawer is discharged from liability thereon. It merely means that its negotiability ceases. The stale check merely means drawer may not be held liable thereon, but the same remains an evidence of indebtedness and if such debt has not been paid, the debtor may still be liable for payment of such debt, unless in the meanwhile the cause of action based thereon has prescribed or the obligation extinguished. In the ff instances, the notice of dishonor is not necessary to hold the drawer or indorser liable: When notice of dishonor is waived, either before the time of giving notice has arrived or after the omission to give notice, and waiver may be express or implied. When after the exercise of due diligence, it cannot be given or does not reach the parties sought to be charged Where the drawer and drawee are the same person; the drawee is a fictitious person or a person not having capacity to contract; 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 will honor the instrument; when the drawer has countermanded payment. Need not be given to indorser when the drawee is a fictitious person or a person not having the 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 for payment; where the instrument was made or accepted for his accommodation Where due notice of dishonor by non-acceptance has been given, unless in the meantime, the instrument has been accepted 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. SEC. 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 NOTICE IS GIVEN. SEC. 91 NOTICE GIVEN BY AN AGENT. NOTICE OF DISHONOR MAY BE GIVEN BY ANY AGENT EITHER IN HIS OWN NAME OR IN THE NAME OF ANY PARTY ENTITLED TO GIVE NOTICE, WHETHER THAT PARTY BE HIS PRINCIPAL OR NOT. Notice of dishonor may be given by any agent either in his own name or in the name of any party entitled to give notice, whether that party be his principal or not. This means that a person may effectively give notice for another even if he is not authorized to do so. On the other hand, if the agent is authorized, he may give such notice in his own name as in the case of collecting banks.

Notice of dishonor may be given by any agent either in his own name or in the name of any party entitled to give notice, whether that party be his principal or not. This means that a person may effectively give notice for another even if he is not authorized to do so. On the other hand, if the agent is authorized, he may give such notice in his own name as in the case of collecting banks.

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 ALL SUBSEQUENT HOLDERS AND ALL PRIOR PARTIES WHO HAVE A RIGHT OF RECOURSE AGAINST THE PARTY TO WHOM IT IS GIVEN. SEC. 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. SEC. 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 AND INDEPENDENT HOLDER. SEC. 95 WHEN NOTICE SUFFICIENT. A WRITTEN NOTICE NEED NOT BE SIGNED AND AN INSUFFICENT 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. SEC. 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 NONACCEPTANCE OR NON-PAYMENT. IT MAY IN ALL CASES BE GIVEN BY DELIVERING IT PERSONALLY OR THROUGH THE MAILS. Whether verbal or in writing, the notice must state the ff: Sufficient description of the bill or note A statement that the instrument has been dishonored upon presentment for acceptance or for payment A statement that the instrument has been protested if protest is required An announcement of the intention to look to the party addressed for payment If the written notice lacks any of the aforementioned matters, the same may nevertheless be completed or validated by verbal communication. If there is misdescription, the notice is still valid and effective except if a party was in fact misled. Thus, if the notice states that amount to be paid but was misdescription thereof, the notice is still effective bec the instrument itself states the sum certain in money that has to be paid. If the notice of dishonor is in writing, it can be delivered to the person to whom notice should be given, or it may sent to him by mail. SEC. 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. While Sec 93 refers to the agent of parties who will give notice, Sec 97 refers to agents of persons who will receive the notice. While Sec 93 allows agents to give notice even if they are not authorized, Sec 97 presupposes that the agent that will receive the notice in behalf of his principal is authorized to receive such notice of dishonor. With respect to corporations, notice should be given to those who are duly authorized by the board to bind the corporation. Normally, notice to the president of the corporation would bind the corporation. SEC. 98 NOTICE WHERE THE 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. Notice to a representative is not necessary when: There was in fact, no personal representative; The person to give notice is not aware of the death of the person who is supposed to receive notice; The personal representative cannot be found despite the exercise of reasonable diligence. SEC. 99 NOTICE TO PARTNERS. WHERE THE PARTIES TO BE NOTIFIED ARE PARTNERS, NOTICE TO ANY ONE PARTNER IS NOTICE TO THE FIRM, EVEN THOUGH THERE HAS BEEN A DISSOLUTION. SEC. 100 NOTICE TO PERSONS JOINTLY LIABLE. NOTICE TO JOINT PERSONS WHO ARE NOT PARTNERS MUST BE GIVEN TO EACH OF THEM UNLESS ONE OF THEM HAS AUTHORITY TO RECEIVE SUCH NOTICE FOR THE OTHERS. SEC. 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.

SEC. 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. THE MOMENT THE INSTRUMENT IS DISHONORED WHEN IT IS PRESENTED FOR ACCEPTANCE OR THE MOMENT THE SAME IS DISHONORED FOR NON-PAYMENT, NOTICE OF DISHONOR MUST BE GIVEN WITHIN THE TIME PROVIDED FOR IN SECTION 103 AND 104 OF THE NIL. IF NO NOTICE IS GIVEN WITHIN THE SAME PERIOD TO THE DRAWER OR THE INDORSERS, THEY ARE DISCHARGED FROM SECONDARY LIABILITY. IT SHOULD BE NOTED HOWEVER, THAT THE LIABILITY OF THE DRAWER UNDER A SEPARATE CONTRACT MAY REMAIN ALTHOUGH NO NOTICE OF DISHONOR IS GIVEN TO HIM. THE ABSENCE OF NOTICE OF DISHONOR AFFECTS THE DRAWERS SECONDARY LIABILITY BUT DOES NOT AFFECT THE LIABILITY OF THE DRAW ER UNDER A SEPARATE SOURCE OF OBLIGATION. THUS, IF THE DRAWER ISSUED THE BILL OF EXCHANGE TO THE PAYEE IN PAYMENT OF THE OBLIGATION, THE BILL WAS DISHONORED BY THE DRAWEE WHEN IT WAS PRESENTED FOR ACCEPTANCE AND NO NOTICE OF DISHONOR WAS GIVEN TO THE DRAWER, THE DRAWER IS NO LONGER SECONDARILY LIABLE. HOWEVER, THE DRAWER IS STILL LIABLE BASED ON THE BREACH OF CONTRACT OF SALE. THE DRAWER, IN EFFECT, FAILED TO PAY THE PRICE AND IS THEREFORE STILL LIABLE TO PAY SUCH PRICE DESPITE THE ABSENCE OF NOTICE OF DISHONOR. SEC. 103 WHERE PARTIES RESIDE IN SAME PLACE. WHERE THE PERSON GIVING AND THE PERSON TO RECEIVE NOTICE RESIDES IN THE SAME PLACE, NOTICE MUST BE GIVEN WITHIN THE FF 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 TH 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. When the law refers to persons residing in the same place under Sec 103, the law means the same town or city. Notice may either be personal or by mail. Usual hours of rest has been defined as any of the hours when the member of the household are attending their ordinary affairs. Under Par C, notice is still considered timely given even if in fact the notice did not reach the person who is supposed to receive notice of dishonor the day following. It might even be possible under present circumstances to expect that the mail will reach the destination the ff day. It is therefore enough that the person who is supposed to give notice must exert effort that it will reach the day following SEC. 104 WHERE PARTIES RESIDE IN DIFFERENT PLACES. WHERE THE PERSON GIVNG AND THE PERSON TO RECEIVE NOTICE RESIDE IN DIFFERENT PLACES, THE NOTICE MUST BE GIVEN WITHIN THE FF 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 OFFIE WITHIN THE TIME SPECIFIED IN THE LAST SUBDIVISION. SEC. 105 WHEN SENDER DEEMED TO HAVE GIVEN DUE NOTICE. WHERE NOTICE OF DISHONOR IS DULY ADDRESSED AND DEPOSITED IN THE POST OFFICE, THE SENDER IS DEEMED TO HAVE GIVEN DUE NOTICE, NOTWITHSTANDING ANY MISCARRIAGE IN THE MAILS. SEC. 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. IF THE NOTICE WAS DULY MAILED, MEANING DULY ADDRESSED AND DEPOSITED IN THE POST OFFICE WITH SUFFICIENT STAMPS, THERE IS DEEMED TO BE NOTICE OF DISHONOR EVEN IF THERE WAS MISCARRIAGE IN THE MAILS. THUS, IF THE NOTICE WAS MISDELIVERED TO ANOTHER PERSON, THERE IS STILL DEEMED TO BE NOTICE OF DISHONOR SO LONG AS IT WAS PROPERLY MAILED ON TIME. THE NOTICE MAY BE MAILED UNDER SECTION 106 IN: A) THE POST OFFICE ITSELF, B) BRANCH POST OFFICE, AND C) LETTER BOX UNDER THE CONTROL OF THE POST-OFFICE DEPARTMENT. SEC. 107 NOTICE TO 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. An indorser who receives a notice of dishonor is entitled to give notice to persons from whom he can ask reimbursement. If notice is received by an indorser, he can avail of the period provided for in Sec 103 and 104. Pursuant to the Rules of Court, the best evidence of the fact of notice sent is the certification to that effect by the postmaster. SEC. 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. BUT WHERE THE NOTICE IS ACTUALLY RECEIVE 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. The last paragraph of Sec 108 clearly manifests that strict compliance is not necessary. It is not absolutely necessary that the notice is sent in the places mentioned in paragraphs a, b and c. It is enough that notice is actually received on time or within the time prescribed under Sec 103 and 104 by the person who is supposed to receive notice even if he received the same in a different place. Thus, if the indorser personally received a notice of dishonor the day following the dishonor, the same is valid even if he received it while he was in a restaurant eating his lunch. Needless to state, there must be proof of actual receipt of the notice of dishonor.

SEC. 109 WAIVER OF NOTICE. NOTICE OF DISHONOR MAY BE WAIVED EITHER BEFORE THE TIME OF GIVING NOTICE HAS ARRIVED OR AFTER THE OMMISSION TO GIVE DUE NOTICE, AND THE WAIVER MAY BE EXPRESS OR IMPLIED. SEC. 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 HIM ONLY. Waiver means the person who is making the waiver renounces the benefit of the act or matter in his favor. Thus, the rule on the giving of notice of dishonor is for the benefit of the drawer or the indorsers. If no notice is given, they are discharged. The indorsers or the drawer the benefit of the notice of dishonor and they will still be liable as a consequence despite the absence of such notice. Types of waiver: The waiver of notice of dishonor may be either express or implied Written waiver may either be written in the instrument itself or written above the signature of the indorser Waiver may either be before the time of giving of notice or after the failure to give notice. If the waiver is written on the instrument itself, it is binding on all parties If the waiver is written above the signature of the indorser, it binds only the such indorser and he is the only one who is deemed to have made the waiver. SEC. 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. A protest is a formal statement in writing made by a notary public at the instance of the holder declaring that the instrument has been presented for payment or for acceptance but the same was dishonored. Protest is indispensable only in a foreign bill of exchange. However, this requirement may also be a subject to waiver. Waiver of protest has the ff effects: Protest itself is waived Presentment for payment or acceptance is also deemed waived Notice of dishonor is also deemed waived. SEC. 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 SOUGHT TO BE CHARGED. SEC. 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. SEC. 114 WHEN NOTICE NEED NOT BE GIVEN TO DRAWER. NOTICE OF DISHONOR IS NOT QUITE REQUIED TO BE GIVEN TO THE DRAWER IN EITHER OF THE FF CASES: A. WHERE THE DRAWER AND DRAWEE ARE THE SAME PERSON; B. WHEN THE DRAWEE IS A 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. An example of Par D is a situation where the drawer closed his account with the drawee bank. Hence, the drawer has no reason to expect that the drawee bank will honor the check that he issued. Countermand under Par E stop payment order An indorsee may sue his immediate indorser even if the latter is already discharged on the instrument, based on their contract. Thus, if the indorsement was made as consideration for the goods that the indorser purchased, his liability to pay for the goods still remains. Failure to give notice of dishonor of assigned check An assigned check, not negotiated, has an effect similar to a sale. The assignor warrants both the credit itself and the person of the debtor, if so stipulated, and if there be any breach of warranties, the assignor should be held liable.

The dishonor of an assigned check simply stresses its liability and the failure to give a notice of dishonor will not discharge it from liability, the reason being that the cause of action stems from the breach of warranties in the assignment and not from the dishonoring of the check.

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 FF 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. An indorser does not admit the existence of the drawee when he indorses the bill of exchange. However, he has only himself to blame if he was aware that the drawee is not existing and he still indorsed the instrument. He may not e aware that the drawee was fictitious at the time he took the instrument but he cannot expect that the instrument will be honored in the hands of the subsequent holders if he was already aware of such fact at the time of his indorsement. Example of Par B if the indorser is the authorized agent of the drawee who dishonored the instrument, then notice of dishonor need not be given to the drawer. This is possible for instance if the indorser is the bank teller who dishonored the check in behalf of the drawee bank. SEC. 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. Notice of dishonor by non-payment is no longer necessary if the bill of exchange was already dishonored by non-acceptance and notice of such dishonor by non-acceptance was previously given. However, if the drawee initially refused to accept the instrument but later changed his mind and accepted the bill of exchange, the holder or any other person who is supposed to give notice must give notice of the acceptor dishonored the instrument and refused to accept the same. SEC. 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. For example DR issued a bill of exchange to P payable to the order of P and addressed to the drawee, DW. P indorsed the instrument to A and A indorsed the instrument to B. On March 10, 2004, B presented the instrument for acceptance to DW but DW refused to accept. B did not give any notice of dishonor. B thereafter, indorsed the instrument to C, who in turn, indorsed the instrument to D. If the holder is still B, B can no longer enforce the secondary liability of DR, P, and A bec of his failure to give notice. However, if D is a holder in due course who was not aware of the previous dishonor, he can still recover from and enforce the secondary liability of Dr, P and A. As to D, a holder in due course, the persons secondarily liable are not discharged. 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.

DISCHARGE
SEC. 119 A. B. INSTRUMENT; HOW DISCHARGED. A NEGOTIABLE INSTRUMENT IS DISCHARGED: 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; 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. Discharge means release from further liability, obligation, or from the binding effect of the negotiable instrument Under Art 1231, obligations are extinguished by: Payment or performance; Loss of the thing due Condonation Confusion or merger Compensation Novation Other causes such as annulment, rescission, fulfillment of a resolutory condition, and prescription, other means provided for by law In the absence of an agreement, express or implied, payment means the discharge of the debt or obligation in money and unless the parties so agree, a debtor has no right, except at his own peril, to substitute something in lieu of cash as medium of payment. However, every negotiable instrument or check, whether managers check or ordinary check, does not, by itself, operate as payment nor does it discharge an obligation. Under payment as provided by Sec 88 the ff must concur:

It must be made by or in behalf of the principal debtor or the accommodated party if such was made or accepted for his accommodation The payment must be made to the holder The payor must be in good faith and without notice that his title is defective Payment must be made at or after maturity date of the instrument Payment cannot be made by delivering another negotiable instrument By whom made: The principal debtor may not be the person indicated to be the person primarily liable in the instrument. An accommodated party may be the principal debtor even if he signed merely as a secondary party. Payment by the secondary party who is not the accommodated party will not discharge the instrument Under Par C, the cancellation must be effected by destroying the instrument either by tearing it up, burning it, or writing the word cancelled on the instrument. The act of destroying the instrument must also be made by the holder of the instrument intentionally, which presupposes that the holder still has physical possession of the instrument, otherwise, he cannot effect an intentional cancellation thereof. Thus, a debtor may not unilaterally discharge herself from her liability as drawer by mere expediency of withdrawing funds from the drawee bank. He is still liable therefor. Withdrawal of funds is not one of the grounds for extinguishment of a simple contract. Under Par E, the phrase in his own right has been construed to exclude a case where a maker acquires the instrument in a purely representative capacity. However, the maker is discharged even if he acquired the instrument through an agent who did not disclose his principal.

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 HOLDERS 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 HOLDERS 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. The majority view is that the grounds set forth in Par B to F applies only to parties who one the face of the instrument itself are secondarily liable, and not to parties primarily liable thereon, even if they be only sureties or for a co-maker or accommodation makers. In other words, a maker who is only an accommodation maker is not discharged by any of the grounds provided for in Sec 120. In connection with Par B, Sec 48 provides that 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 instrument. Par C does not include discharge by operation of law such as: bankruptcy, insolvency, prescription, and failure to give notice of dishonor. Under Par D, the tender of payment if refused, does not extinguish obligation unless completed or followed by consignation of the sum due. The tender must be in cash and both tender and consignation must be unconditional. Consignation must follow, supplement or complement the tender of payment, if discharge of the obligation is to be obtained. The effect of a valid tender of payment, without consignation, is merely to exempt the debtor from payment of interest and/or damages. Under Par E, it has been submitted that the reservation will not release the secondary parties only if they acceded to the release of the principal debtor. If the release was done without their consent, they cannot be made liable bec the drawer and the general indorsers engage to pay only if the instrument is dishonored. If there is no dishonor, they cannot be made liable. Under Par F, an agreement to extend the time of payment varies the original undertaking of the secondary parties. Under Par F, it has been submitted that an accommodation party should be treated in such capacity has he has signed the instrument and be discharged as such. If the accommodation party is a general indorser, his liability will be treated as if he is an ordinary general indorser. Thus, an extension of time extended to the maker (who is the accommodated party) should benefit the accommodation parties such that he is discharged from his liability pursuant to Sec 120 Par F. Sec 142 provides, 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. When 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. Sec 144 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 the indorsers are discharged. Sec 188 Where the holder of a check procures it to be accepted or certified, th e drawer and all indorsers are discharged from liability thereon.

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 REGARDS ALL PRIOR PARTIES, AND HE MAY STRIKE OUT HIS OWN AND ALL SUBSEQUENT INDORSEMENTS AND AGAIN 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. The NCC recognizes a situation where a third person will pay for and in behalf of the principal debtor. It provides, Whoever pays for another may demand from the debtor what he has paid except that if he paid without the knowledge or against the will of the debtor, he can recover only insofar at the payment has been beneficial to the debtor. The rule is that where a note is presented by a stranger, without a legal transfer, the presumption is that it was lost, stolen, or otherwise improperly circulated. SEC. 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. Requisites of valid renunciation: A. The renunciation must be in writing, unless the instrument is delivered up to the person primarily liable thereon, who is the maker or acceptor. This exception is reinforced by Art 1271 of the NCC, which provides, The delivery of a private document evidencing a credit, made voluntarily by the creditor to the debtor, implies the renunciation of the action which the former had against the latter. B. The renunciation must be absolute and unconditional C. The renunciation must be expressly made before, at or after its maturity. It has been submitted that Sec 122 must also conform to Art 1270 of the NCC which states that there must be an acceptance by the debtor of the renunciation either expressly or impliedly before there can be a valid condonation. SEC. 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.

PRESENTMENT FOR ACCEPTANCE

SEC. 132 ACCEPTANCE; HOW MADE, BY AND SO FORTH. THE ACCEPTANCE OF A BILL IS THE SIGNIFICATION BY THE DRAWEE OF HIS ASSENT TO THE ORDER OF THE DRAWER. 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. The law does not require any formal way of signifying acceptance of the drawer. Normally, acceptance is made by placing a stamp accepted accompanied by the signature of the drawee or his authorized representative on the bill. Nevertheless, mere signature of the drawee can be construed as a valid acceptance. It was observed, however, that mere admission by the drawee of the correctness of the amount stated in the instrument is not an acceptance. It does not signify an assent to the order of the drawee. Thus, there is no acceptance if the drawee merely stated: I return the drawers order. Balance of his account is in the same as order. SEC. 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. 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 IN FAVOR OF A PERSON TO WHOM IT IS SHOWN AND WHO, ON THE FAITH THEREOF, RECEIVES THE BILL FOR VALUE. Thus, acceptance can be made by sending a telegram to the holder. However, the acceptance stated in the telegram will not bind the acceptor to the subsequent holder if the said holder is not aware thereof. SEC. 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. SEC. 136 TIME ALLOWED DRAWEE TO ACCEPT. THE DRAWEE IS ALLOWED 24 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. SEC. 137 LIABILITY OF DRAWEE RETURNING OR DESTROYING BILL. WHERE A DRAWEE TO WHOM A BILL IS DELIVERED FOR ACCEPTANCE DESTROYS THE SAME, OR REFUSES WITHIN 24 HOURS AFTER SUCH DELIVERY OR WITHIN SUCH OTHER PERIOD AS THE HOLDER MAY ALLOW, TO RETURN THE BILL ACCEPTED OR NON-ACCEPTANCE TO THE HOLDER, HE WILL BE DEEMED TO HAVE ACCEPTED THE SAME. The conflict is more apparent than real, and is based on the assumption that the drawee is entitled under Sec 136 makes no such provision. The bill is at all times the property of the holder, and he is entitled to have it when he wants it, and Sec 137 so provides. If the holder should demand return before 24 hours, the drawee would be required to comply on pain of being held as an acceptor, but return within 24 hours unaccepted would not be a dishonor. The drawee could still accept by notification within 24 hours. See Sec 191. Here an extrinsic acceptance, Sec 134, would play an important part. If the drawee after returning the bill still refused to act after the expiration of the time allowed, the holder then would be required to treat the bill as dishonored or lose his rights against prior parties. SEC. 138 ACCEPTANCE OF AN 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 TOACCEPT, 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 PRESENTMENT. It should be noted that the holder may refuse to take a qualified acceptance and if he does not obtain an unqualified acceptance, be may treat the bill as dishonored by non-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 assents 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. It has been held that acceptance is presumed to be unqualified or absolute. It was explained that if the drawee intends to qualify his acceptance, he must do so distinctly and unmistakably or else the acceptance will be taken as absolute. SEC. 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. SEC. 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 ELSEWHERE. SEC. 141 A. B. QUALIFIED ACCEPTANCE. AN ACCEPTANCE IS QUALIFIED WHICH IS: 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;

C. D. E.

LOCAL; THAT IS TO SAY, AN ACCEPTANCE TO PAY ONLY AT A PARTICULAR PLACE; QUALIFIED AS TO TIME; THE ACCEPTANCE OF SOME, ONE OR MORE OF THE DRAWEES BUT NOT OF ALL.

SEC. 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. 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 IN NO OTHER CASE IS PRESENTMENT FOR ACCEPTANCE NECESSARY IN ORDER TO RENDER ANY PARTY TO THE BILL LIABLE. It is not necessary to present a check for acceptance as it is not one of those that is required to be presented for acceptance under Sec 143. SEC. 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 DRAWER OR SOME PERSON AUTHORIZED TO ACCEPT OR REFUSE ACCEPTANCE ON HIS BEHALF, AND A. WHERE A BILL ADDRESSED TO TWO OR MORE DRAWEES WHO ARE NOT PARTNERS, PRESENTMENT MUST BE MADE TO THEM ALL UNLESS ONE HAS THE 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 HIS CREDITORS, PRESENTMENT MAY BE MADE TO HIM OR TO HIS TRUSTEE OR ASSIGNEE 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 72 AND 85 OF THIS ACT. WHEN SATURDAY IS NOT OTHERWISE A HOLIDAY, PRESENTMENT FOR ACCEPTANCE MAY BE MADE BEFORE 12 OCLOCK NOON ON THAT DAY. SEC. 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. SEC. 148 WHERE PRESENTMENT IS EXCUSED. PRESENTMENT FOR ACCEPTANCE IS EXCUSED AND ABILL MAY BE TREATED AS DISHONORED BY NON-ACCEPTANCE IN EITHER OF THE FF 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 CANNOT BE MADE C. WHERE ALTHOUGH PRESENTMENT HAS BEEN REGULAR, ACCEPTANCE HAS BEEN REFUSED ON SOME OTHER GROUND