Negotiable Instruments Law [Sec. 143-151]

XI. PRESENTMENT FOR ACCEPTANCE

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.

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 to be presented for acceptance must either present it for acceptance or negotiate it within a reasonable time. If he fails to do so, the drawer and all indorsers are discharged.

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 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.

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.

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 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.

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.

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.

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.

Negotiable Instruments Law [Sec. 152-160]

XII. PROTEST

Sec. 152. In what cases protest necessary. – Where a foreign bill appearing on its face to be such is dishonored by nonacceptance, it must be duly protested for nonacceptance, by nonacceptance is dishonored and where such a bill which has not previously been dishonored by nonpayment, it must be duly protested for nonpayment. If it is not so protested, the drawer and indorsers are discharged. Where a bill does not appear on its face to be a foreign bill, protest thereof in case of dishonor is unnecessary.

Sec. 153. Protest; how made. – The protest must be annexed to the bill or must contain a copy thereof, and must be under the hand and seal of the notary making it and must specify:

(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.

Sec. 154. Protest, by whom made. – Protest may be made by:

(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.

Sec. 155. Protest; when to be made. – When a bill is protested, such protest must be made on the day of its dishonor unless delay is excused as herein provided. When a bill has been duly noted, the protest may be subsequently extended as of the date of the noting.

Sec. 156. Protest; where made. – A bill must be protested at the place where it is dishonored, except that when a bill drawn payable at the place of business or residence of some person other than the drawee has been dishonored by 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.

Sec. 157. Protest both for non-acceptance and non-payment. – A bill which has been protested for non-acceptance may be subsequently protested for non-payment.

Sec. 158. Protest before maturity where acceptor insolvent. – Where the acceptor has been adjudged a bankrupt or an insolvent or has made an assignment for the benefit of creditors before the bill matures, the holder may cause the bill to be protested for better security against the drawer and indorsers.

Sec. 159. When protest dispensed with. – Protest is dispensed with by any circumstances which would dispense with notice of dishonor. Delay in noting or protesting is excused when delay is caused by circumstances beyond the control of the holder and not imputable to his default, misconduct, or negligence. When the cause of delay ceases to operate, the bill must be noted or protested with reasonable diligence.

Sec. 160. Protest where bill is lost and so forth. – When a bill is lost or destroyed or is wrongly detained from the person entitled to hold it, protest may be made on a copy or written particulars thereof.

Negotiable Instruments Law [Sec. 171-177]

XIV. PAYMENT FOR HONOR

Sec. 171. Who may make payment for honor. – Where a bill has been protested for non-payment, any person may intervene and pay it supra protest for the honor of any person liable thereon or for the honor of the person for whose account it was drawn.

Sec. 172. Payment for honor; how made. – The payment for honor supra protest, in order to operate as such and not as a mere voluntary payment, must be attested by a notarial act of honor which may be appended to the protest or form an extension to it.

Sec. 173. Declaration before payment for honor. – The notarial act of honor must be founded on a declaration made by the payer for honor or by his agent in that behalf declaring his intention to pay the bill for honor and for whose honor he pays.

Sec. 174. Preference of parties offering to pay for honor. – Where two or more persons offer to pay a bill for the honor of different parties, the person whose payment will discharge most parties to the bill is to be given the preference.

Sec. 175. Effect on subsequent parties where bill is paid for honor. – Where a bill has been paid for honor, all parties subsequent to the party for whose honor it is paid are discharged but the payer for honor is subrogated for, and succeeds to, both the rights and duties of the holder as regards the party for whose honor he pays and all parties liable to the latter.

Sec. 176. Where holder refuses to receive payment supra protest. – Where the holder of a bill refuses to receive payment supra protest, he loses his right of recourse against any party who would have been discharged by such payment.

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 the bill itself and the protest.

Negotiable Instruments Law [Sec. 178-183]

XV. BILLS IN SET

Sec. 178. Bills in set constitute one bill. – Where a bill is drawn in a set, each part of the set being numbered and containing a reference to the other parts, the whole of the parts constitutes one bill.

Sec. 179. Right of holders where different parts are negotiated. – Where two or more parts of a set are negotiated to different holders in due course, the holder whose title first accrues is, as between such holders, the true owner of the bill. But nothing in this section affects the right of a person who, in due course, accepts or pays the parts first presented to him.

Sec. 180. Liability of holder who indorses two or more parts of a set to different persons. – Where the holder of a set indorses two or more parts to different persons he is liable on every such part, and every indorser subsequent to him is liable on the part he has himself indorsed, as if such parts were separate bills.

Sec. 181. Acceptance of bill drawn in sets. – The acceptance may be written on any part and it must be written on one part only. If the drawee accepts more than one part and such accepted parts negotiated to different holders in due course, he is liable on every such part as if it were a separate bill.

Sec. 182. Payment by acceptor of bills drawn in sets. – When the acceptor of a bill drawn in a set pays it without requiring the part bearing his acceptance to be delivered up to him, and the part at maturity is outstanding in the hands of a holder in due course, he is liable to the holder thereon.

Sec. 183. Effect of discharging one of a set. – Except as herein otherwise provided, where any one part of a bill drawn in a set is discharged by payment or otherwise, the whole bill is discharged.

Negotiable Instruments Law [Sec. 184-189]

XVI. PROMISSORY NOTES AND CHECKS

Sec. 184. Promissory note, defined. – A negotiable promissory note within the meaning of this Act is an unconditional promise in writing made by one person to another, signed by the maker, engaging to pay on demand, or at a fixed or determinable future time, a sum certain in money to order or to bearer. Where a note is drawn to the maker’s own order, it is not complete until indorsed by him.

Sec. 185. Check, defined. – A check is a bill of exchange drawn on a bank payable on demand. Except as herein otherwise provided, the provisions of this Act applicable to a bill of exchange payable on demand apply to a check.

Sec. 186. Within what time a check must be presented. – A check must be presented for payment within a reasonable time after its issue or the drawer will be discharged from liability thereon to the extent of the loss caused by the delay.

Sec. 187. Certification of check; effect of. – Where a check is certified by the bank on which it is drawn, the certification is equivalent to an acceptance.

Sec. 188. Effect where the holder of check procures it to be certified. – Where the holder of a check procures it to be accepted or certified, the drawer and all indorsers are discharged from liability thereon.

Sec. 189. When check operates as an assignment. – A check of itself does not operate as an assignment of any part of the funds to the credit of the drawer with the bank, and the bank is not liable to the holder unless and until it accepts or certifies the check.

Negotiable Instruments Law [Sec. 190-198]

XVII. GENERAL PROVISIONS

Sec. 190. Short title. – This Act shall be known as the Negotiable Instruments Law.

Sec. 191. Definition and meaning of terms. – In this Act, unless the contract otherwise requires:

“Acceptance” means an acceptance completed by delivery or notification;

“Action” includes counterclaim and set-off;

“Bank” includes any person or association of persons carrying on the business of banking, whether incorporated or not;

“Bearer” means the person in possession of a bill or note which is payable to bearer;

“Bill” means bill of exchange, and “note” means negotiable promissory note;

“Delivery” means transfer of possession, actual or constructive, from one person to another;

“Holder” means the payee or indorsee of a bill or note who is in possession of it, or the bearer thereof;

“Indorsement” means an indorsement completed by delivery;

“Instrument” means negotiable instrument;

“Issue” means the first delivery of the instrument, complete in form, to a person who takes it as a holder;

“Person” includes a body of persons, whether incorporated or not;

“Value” means valuable consideration;

“Written” includes printed, and “writing” includes print.

Sec. 192. Persons primarily liable on instrument. – The person “primarily” liable on an instrument is the person who, by the terms of the instrument, is absolutely required to pay the same. All other parties are “secondarily” liable.

Sec. 193. Reasonable time, what constitutes. – In determining what is a “reasonable time” regard is to be had to the nature of the instrument, the usage of trade or business with respect to such instruments, and the facts of the particular case.

Sec. 194. Time, how computed; when last day falls on holiday. – Where the day, or the last day for doing any act herein required or permitted to be done falls on a Sunday or on a holiday, the act may be done on the next succeeding secular or business day.

Sec. 195. Application of Act. – The provisions of this Act do not apply to negotiable instruments made and delivered prior to the taking effect hereof.

Sec. 196. Cases not provided for in Act. – Any case not provided for in this Act shall be governed by the provisions of existing legislation or in default thereof, by the rules of the law merchant.

Sec. 197. Repeals. – All acts and laws and parts thereof inconsistent with this Act are hereby repealed.

Sec. 198. Time when Act takes effect. – This Act shall take effect ninety days after its publication in the Official Gazette of the Philippine Islands shall have been completed.

Enacted: February 3, 1911