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Bill of exchange defined.
SEC. 126. Bill of exchange defined.— A bill of exchange is an unconditional order in writing addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time a sum certain in money to order or to bearer.
Bill not an assignment of funds in hands of drawee.
SEC. 127. Bill not an assignment of funds in hands of drawee.— A bill of itself does not operate as an assignment of the funds in the hands of the drawee available for the payment thereof, and the drawee is not liable on the bill unless and until he accepts the same.
Bill addressed to more than one drawee.
SEC. 128. Bill addressed to more than one drawee.— A bill may be addressed to two or more drawees jointly, whether they are partners or not; but not to two or more drawees in the alternative or in succession.
Inland and foreign bills of exchange.
SEC. 129. Inland and foreign bills of exchange.— An inland bill and foreign, of exchange is a bill which is, or on its face purports to be, both drawn and payable within the Philippine Islands. Any other bill is a foreign bill. Unless the contrary appears on the face of the bill, the holder may treat it as an inland bill.
When bill may be treated as promissory note.
SEC. 130. When bill may be treated as promissory note.— Where in a bill drawer and drawee are the same person, or where the drawee is a fictitious person, or a person not having capacity to contract, the holder may treat the instrument, at his option, either as a bill of exchange or a promissory note.
Referee in case of need.
SEC. 131. Referee in case of need.— The drawer of a bill and any indorser may insert thereon the name of a person to whom the holder may resort in case of need; that is to say, in case the bill is dishonored by nonacceptance or nonpayment. Such person is called the referee in case of need. It is in the option of the holder to resort to the referee in case of need or not, as he may see fit.
Acceptance; how made, and so forth.
SEC. 132. Acceptance; how made, and so forth.— The acceptance of a bill is the signification by the drawee of his assent to the order of the 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.
Holder entitled to acceptance on face of bill.
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.
Acceptance by separate instrument.
SEC. 134. Acceptance by separate instrument.— Where an acceptance is written on a paper other than the bill itself, it does not instrument-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.
Promise to accept; when equivalent to acceptance.
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.
Time allowed drawee to accept.
SEC. 136. Time allowed drawee to accept.—The drawee is allowed twenty-four hours after presentment in which to decide whether or not he will accept the bill; but the acceptance, if given, dates as of the day of presentation.
Liability of drawee retaining or destroying bill.
SEC. 137. Liability of drawee retaining or destroying bill.— Where a drawee to when a bill is delivered for acceptance destroys the same, or refuses within twenty-four hours after such delivery, or within such other period as the holder may allow, to return the bill accepted or nonaccepted to the holder, he will be deemed to have accepted the same.
Acceptance of incomplete bill.
SEC. 138. Acceptance of incomplete bill.—A bill may be accepted before it has been signed by the drawer, or while otherwise incomplete, or when it is overdue, or after it has been dishonored by a previous refusal to accept, or by nonpayment. But when a bill payable after sight is dishonored by nonacceptance 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.
Kinds of acceptances.
SEC. 139. Kinds of acceptances.— 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.
What constitutes a general acceptance.
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.
Qualified acceptance.
SEC. 141. Qualified acceptance.— An acceptance is qualified which is— (a) Conditional; that is to say, which makes payment by the acceptor dependent on the fulfillment of a condition therein stated; (b) Partial; that is to say, an acceptance to pay part only of the amount for which the bill is drawn; (c) Local; that is to say, an acceptance to pay only at a particular place; (d) Qualified as to time; (e) The acceptance of some one or more of the drawees, but not of all.
Rights of parties as to qualified acceptance.
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, lie may treat the bill as dishonored by nonacceptance. 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.
When presentment for acceptance must be made.
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.
When failure to present releases drawer and indorser.
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 fail to do so, the drawer and all indorsers are discharged.
Presentment; how made.
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.
On what days presentment may be made.
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.
Presentment where time is insufficient.
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 not 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.
Where presentment is excused.
SEC. 148. Where presentment is excused.— Presentment for acceptance is excused, and a bill may be treated as dishonored by nonacceptanee, 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.
When dishonored by nonacceptanee.
SEC. 149. When dishonored by nonacceptanee.— A bill is dishonored by nonacceptanee— (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.
Duty of holder where bill 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 nonacceptanee or he loses the right of recourse against the drawer and indorsers.
Rights of holder where bill not accepted.
SEC. 151. Rights of holder where bill not accepted.— When a bill is dishonored by nonacceptanee, an immediate right of recourse against the drawers and indorsers accrues to the holder and no presentment for payment is necessary.
In what cases protest necessary.
SEC. 152. In what cases protest necessary.— Where a foreign bill appearing on its face to be such is dishonored by nonaceeptance, it must be duly protested for nonacceptanee, and where such a bill which has not previously been dishonored by nonacceptanee is 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.
Protest; how made.
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.
Protest; by whom made.
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.
Protest; when to be made.
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.
Protest; where made.
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 nonpayment at the place where it is expressed to be payable, and no further presentment for payment to, or demand on, the drawee is necessary.
Protest both for nonacceptance and nonpayment.
SEC. 157. Protest both for nonacceptance and nonpayment.— A bill which has been protested for nonacceptance may be subsequently protested for nonpayment.
Protest before maturity where acceptor insolvent.
SEC. 158. Protest before maturity where acceptor insolvent.— Where the acceptor lias 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 indorse.
When protest dispensed with.
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.
Protest where bill is lost, and so forth.
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.
When bill may be accepted for honor.
SEC. 161. When bill may be accepted for honor.— Where a bill of exchange has been protested for dishonor by nonacceptance or protested for better security, and is not overdue, any person not being a party already liable thereon may, with the consent of the holder, intervene and accept the bill supra protest for the honor of any party liable thereon, or for the honor of the person for whose account the bill is drawn. The acceptance for honor may be for part only of the sum for which the bill is drawn; and where there has been an acceptance for honor for one party, there may be a further acceptance by a different person for the honor of another party.
Acceptance for honor; how made.
SEC. 162. Acceptance for honor; how made.— An acceptance for honor supra protest must be in writing, and indicate that it is an acceptance for honor, and must be signed by the acceptor for honor.
When deemed to be an acceptance for honor of the drawer.
SEC. 163. When deemed to be an acceptance for honor of the drawer.— Where an acceptance for honor does not expressly state for whose honor it is made, it is deemed to be an acceptance for the honor of the drawer.
Liability of the acceptor for honor.
SEC. 164. Liability of the acceptor for honor.— The acceptor for honor is liable to the holder and to all parties to the bill subsequent to the party for whose honor he has accepted.
Agreement of acceptor for honor.
SEC. 165. Agreement of acceptor for honor.— The acceptor for honor, by such acceptance engages that he will on due presentment pay the bill according to the terms of his acceptance, provided it shall not have been paid by the drawee, and provided also that it shall have been duly presented for payment and protested for nonpayment and notice of dishonor given to him.
Maturity of bill payable after sight; accepted for honor.
SEC. 166. Maturity of bill payable after sight; accepted for honor.— Where a bill payable after sight is accepted for honor, its maturity is calculated from the date of the noting for non-acceptance and not from the date of the acceptance for honor.
Protest of bill accepted for honor, and so forth.
SEC. 167. Protest of bill accepted for honor, and so forth.— Where a dishonored bill has been accepted for honor supra protest or contains a reference in case of need, it must be protested for nonpayment before it is presented for payment to the acceptor for honor or referee in case of need.
Presentment for payment to acceptor for honor, how made.
SEC. 168. Presentment for payment to acceptor for honor, how made.— Presentment for payment to the acceptor for honor must paymen be made as follows: (a) If it is to be presented in the place where the protest for nonpayment was made, it must be presented not later than the day following its maturity. (b) If it is to be presented in some other place than the place where it was protested, then it must be forwarded within the time specified in section one hundred and four.
When delay in making presentment is excused.
SEC. 169. When delay in making presentment is excused.— The provisions of section eighty-one apply where there is delay in making presentment to the acceptor for honor or referee in case of need.
Dishonor of bill by acceptor for honor.
SEC. 170. Dishonor of bill by acceptor for honor.—When the bill is dishonored by the acceptor for honor it must be protested for nonpayment by him.
Who may make payment for honor.
SEC. 171. Who may make payment for honor.— Where a bill has been protested for nonpayment, 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.
Payment for honor; how made.
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.
Declaration before payment for honor.
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.
Preference of parties offering to pay for honor.
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.
Effect on subsequent parties where bill is paid for honor.
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, hut 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.
Where holder refuses to receive payment supra protest.
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.
Rights of payer for honor.
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.
Bills in sets constitute one bill.
SEC. 178. Bills in sets 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.
Right of holders where different parts are negotiated.
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 rights of a person who in due course accepts or pays the part first presented to him.
Liability of holder who indorses two or more parts of a set to different persons.
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.
Acceptance of bills drawn in sets.
SEC. 181. Acceptance of bills drawn in sets.— The acceptance may be written on any part and it must be written on one part only. If the drawee accepts more than one part, and such accepted parts are negotiated to different holders in due course, he is liable on every such part as if it were a separate bill.
Payment by acceptor of bills drawn in sets.
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 that part at maturity is outstanding in the hands of a holder in due course, he is liable to the holder thereon.
Effect of discharging one of a set.
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.
Provisions on this page are reproduced verbatim from official open data. See the attribution line.
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).