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 principal debtor made
at or after the maturity of the instrument discharges. 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.

Renunciation defined.
It is the act of surrendering a right or claim without recompense, but it can be
applied with equal propriety to the relinquishment of a demand upon an agreement
supported by a consideration.
Also an act of renouncing/waiving/surrendering a right or claim against the
parties liable, with or without consideration.
The act of giving up a right.

Requisites of Renunciation
1. Renunciation must be expressed in writing.
Unless the instrument is delivered up/orally made to the person primarily
liable thereon, who is the maker, acceptor or drawee who has accepted the
instrument.
2. The renunciation must be absolute and unconditional.
3. The renunciation must be expressly made before, at or after its maturity.

Effects of renunciation against:

Principal Debtor- it discharges the instrument and all parties, but it will not
affect the rights of a holder in due course without notice.
September 1,
2013
Pay to P or order P10,000 on demand.
To: X (drawee-acceptor)
(Sgd.) Drawer
P indorses the bill to A, A to B, B to C, C to D, holder. D renounces his rights against
X. Later, D indorsed the instrument to E, without notice of the renunciation. In this
case, E can still enforce his rights against X because the renunciation, according to
law, will not affect the rights of a holder in due course without notice.

Secondarily Liable- the instrument is not discharged. But the parties

obtaining the renunciation, as well as the parties subsequent to him, are
discharged.
When renunciation discharges the instrument.
a. It is absolute and unconditional.
b. It is made at or after maturity.
c. It is made in favor of the person primarily liable.
d. It is done in writing, or if done orally, the instrument must be delivered up
to the person
primarily liable.

Renunciation defined.
It is the act of surrendering a right or claim without recompense, but it can be
applied with equal propriety to the relinquishment of a demand upon an agreement
supported by a consideration.
For better and easy understanding, Renunciation is simply an act of
renouncing/waiving/surrendering a right or claim against the parties liable, with or
without consideration.
The act of giving up a right.

Requisites of Renunciation
1. Renunciation must be expressed in writing. But if the instrument was already
delivered to the person primarily liable, renunciation may be expressed in oral.
This exception is reinforced by Article 1271 of the Civil Code, which provides that
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.
2. The renunciation must be absolute and unconditional.
3. The renunciation must be expressly made before, at or after its maturity.
Effects of renunciation against:
Principal Debtor- it discharges the instrument and all parties, but it will not
affect the rights of a holder in due course without notice.
August 2013
Pay to P or order P10,000 on demand.
To: X (drawee-acceptor)
(Sgd.) Drawer
P indorses the bill to A, A to B, B to C, C to D, holder. D renounces his rights against
X. Later, D indorsed the instrument to E, without notice of the renunciation. In this
case, E can still enforce his rights against X because the renunciation, according to
law, will not affect the rights of a holder in due course without notice.
Secondarily Liable- the instrument is not discharged. But the parties
obtaining the renunciation, as well as the parties subsequent to him, are
discharged.
When renunciation discharges the instrument.
a. It is absolute and unconditional.
b. It is made at or after maturity.

c. It is made in favor of the person primarily liable.

d. It is done in writing, or if done orally, the instrument must be delivered up
to the person
primarily liable.
The requirement prescribed in Art.1270 of the Civil Code should be read into Section
122 as additional requisites. One of the acts by which obligation is extinguished is
the Condonation or remission of debt and refers to Renunciation of the principal
debt.
Requisites of Remission
a. There must be an agreement
b. The parties must be capacitated
c. There must be a subject matter
d. The cause or consideration is generosity
e. Obligation is demandable at the time of remission
f. Remission must not be inofficious (not violating the standards of morality)
The two provisions should be read and construed together. To be valid, the
renunciation of rights of holder must comply not only with the requirements of
Section 122 of the NIL, but also with Art. 1270 of the Civil Code.
renunciation of holder:

holder may expressly renounce his rights vs. any party to the instrument, beforeor after its
maturity

absolute and unconditional renunciation of his rights vs. principal debtor made ator after maturity
discharges the instrument

Renunciation does not affect rights of HDC w/o notice.

Renunciation must be in writing unless instrument delivered up to person

primarily liable thereon