Act No.

2031
February 03, 1911
THE NEGOTIABLE INSTRUENTS LA!
THE NEGOTIABLE INSTRUMENTS LAW
I. FORM AND INTERPRETATION
Section 1. Form of negotiable instruments. - An instrument to e
ne!oti"#e must con$orm to t%e $o##o&in! re'uirements(
)"* It must e in &ritin! "n+ si!ne+ , t%e m"-er or +r"&er.
)* Must cont"in "n uncon+ition"# /romise or or+er to /", " sum
cert"in in mone,.
)c* Must e /","#e on +em"n+0 or "t " $i1e+ or +etermin"#e $uture
time.
)+* Must e /","#e to or+er or to e"rer. "n+
)e* W%ere t%e instrument is "++resse+ to " +r"&ee0 %e must e
n"me+ or ot%er&ise in+ic"te+ t%erein &it% re"son"#e cert"int,.
Sec. 2. What constitutes certainty as to sum. 3 T%e sum /","#e is "
sum cert"in &it%in t%e me"nin! o$ t%is Act0 "#t%ou!% it is to e /"i+(
)"* &it% interest. or
)* , st"te+ inst"##ments. or
)c* , st"te+ inst"##ments0 &it% " /ro4ision t%"t0 u/on +e$"u#t in
/",ment o$ "n, inst"##ment or o$ interest0 t%e &%o#e s%"## ecome
+ue. or
)+* &it% e1c%"n!e0 &%et%er "t " $i1e+ r"te or "t t%e current r"te. or
)e* &it% costs o$ co##ection or "n "ttorne,5s $ee0 in c"se /",ment s%"##
not e m"+e "t m"turit,.
Sec. 6. When promise is unconditional. - An un'u"#i$ie+ or+er or
/romise to /", is uncon+ition"# &it%in t%e me"nin! o$ t%is Act t%ou!%
cou/#e+ &it%(
)"* An in+ic"tion o$ " /"rticu#"r $un+ out o$ &%ic% reimursement is to
e m"+e or " /"rticu#"r "ccount to e +eite+ &it% t%e "mount. or
)* A st"tement o$ t%e tr"ns"ction &%ic% !i4es rise to t%e instrument.
But "n or+er or /romise to /", out o$ " /"rticu#"r $un+ is not
uncon+ition"#.
Sec. 7. Determinable future time; what constitutes. 3 An instrument is
/","#e "t " +etermin"#e $uture time0 &it%in t%e me"nin! o$ t%is Act0
&%ic% is e1/resse+ to e /","#e(
)"* At " $i1e+ /erio+ "$ter +"te or si!%t. or
)* On or e$ore " $i1e+ or +etermin"#e $uture time s/eci$ie+ t%erein.
or
)c* On or "t " $i1e+ /erio+ "$ter t%e occurrence o$ " s/eci$ie+ e4ent
&%ic% is cert"in to %"//en0 t%ou!% t%e time o$ %"//enin! e
uncert"in.
An instrument /","#e u/on " contin!enc, is not ne!oti"#e0 "n+ t%e
%"//enin! o$ t%e e4ent +oes not cure t%e +e$ect.
Sec. 8. Additional provisions not affecting negotiability. 3 An
instrument &%ic% cont"ins "n or+er or /romise to +o "n, "ct in
"++ition to t%e /",ment o$ mone, is not ne!oti"#e. But t%e
ne!oti"#e c%"r"cter o$ "n instrument ot%er&ise ne!oti"#e is not
"$$ecte+ , " /ro4ision &%ic%(
)"* "ut%ori9es t%e s"#e o$ co##"ter"# securities in c"se t%e instrument
e not /"i+ "t m"turit,. or
)* "ut%ori9es " con$ession o$ :u+!ment i$ t%e instrument e not /"i+
"t m"turit,. or
)c* &"i4es t%e ene$it o$ "n, #"& inten+e+ $or t%e "+4"nt"!e or
/rotection o$ t%e o#i!or. or
)+* !i4es t%e %o#+er "n e#ection to re'uire somet%in! to e +one in
#ieu o$ /",ment o$ mone,.
But not%in! in t%is section s%"## 4"#i+"te "n, /ro4ision or sti/u#"tion
ot%er&ise i##e!"#.
Sec. ;. Omissions; seal; particular money. - T%e 4"#i+it, "n+
ne!oti"#e c%"r"cter o$ "n instrument "re not "$$ecte+ , t%e $"ct
t%"t(
)"* it is not +"te+. or
)* +oes not s/eci$, t%e 4"#ue !i4en0 or t%"t "n, 4"#ue %"+ een
!i4en t%ere$or. or
)c* +oes not s/eci$, t%e /#"ce &%ere it is +r"&n or t%e /#"ce &%ere it
is /","#e. or
)+* e"rs " se"#. or
1 | P a g e
Act No. 2031 Ne"ot#ab$e I%&tru'e%t& La(
)e* +esi!n"tes " /"rticu#"r -in+ o$ current mone, in &%ic% /",ment
is to e m"+e.
But not%in! in t%is section s%"## "#ter or re/e"# "n, st"tute re'uirin!
in cert"in c"ses t%e n"ture o$ t%e consi+er"tion to e st"te+ in t%e
instrument.
Sec. <. When payable on demand. 3 An instrument is /","#e on
+em"n+(
)"* W%en it is so e1/resse+ to e /","#e on +em"n+0 or "t si!%t0 or
on /resent"tion. or
)* In &%ic% no time $or /",ment is e1/resse+.
W%ere "n instrument is issue+0 "cce/te+0 or in+orse+ &%en
o4er+ue0 it is0 "s re!"r+s t%e /erson so issuin!0 "cce/tin!0 or
in+orsin! it0 /","#e on +em"n+.
Sec. =. When payable to order. 3 T%e instrument is /","#e to or+er
&%ere it is +r"&n /","#e to t%e or+er o$ " s/eci$ie+ /erson or to %im
or %is or+er. It m", e +r"&n /","#e to t%e or+er o$(
)"* A /",ee &%o is not m"-er0 +r"&er0 or +r"&ee. or
)* T%e +r"&er or m"-er. or
)c* T%e +r"&ee. or
)+* T&o or more /",ees :oint#,. or
)e* One or some o$ se4er"# /",ees. or
)$* T%e %o#+er o$ "n o$$ice $or t%e time ein!.
W%ere t%e instrument is /","#e to or+er0 t%e /",ee must e n"me+
or ot%er&ise in+ic"te+ t%erein &it% re"son"#e cert"int,.
Sec. >. When payable to bearer. 3 T%e instrument is /","#e to
e"rer(
)"* W%en it is e1/resse+ to e so /","#e. or
)* W%en it is /","#e to " /erson n"me+ t%erein or e"rer. or
)c* W%en it is /","#e to t%e or+er o$ " $ictitious or non3e1istin!
/erson0 "n+ suc% $"ct &"s -no&n to t%e /erson m"-in! it so
/","#e. or
)+* W%en t%e n"me o$ t%e /",ee +oes not /ur/ort to e t%e n"me o$
"n, /erson. or
)e* W%en t%e on#, or #"st in+orsement is "n in+orsement in #"n-.
Sec. 1?. Terms when sufficient. 3 T%e instrument nee+ not $o##o& t%e
#"n!u"!e o$ t%is Act0 ut "n, terms "re su$$icient &%ic% c#e"r#,
in+ic"te "n intention to con$orm to t%e re'uirements %ereo$.
Sec. 11. Date presumption as to. 3 W%ere t%e instrument or "n
"cce/t"nce or "n, in+orsement t%ereon is +"te+0 suc% +"te is
+eeme+ /rim" $"cie to e t%e true +"te o$ t%e m"-in!0 +r"&in!0
"cce/t"nce0 or in+orsement0 "s t%e c"se m", e.
Sec. 12. Ante-dated and post-dated. - T%e instrument is not in4"#i+
$or t%e re"son on#, t%"t it is "nte3+"te+ or /ost3+"te+0 /ro4i+e+ t%is
is not +one $or "n i##e!"# or $r"u+u#ent /ur/ose. T%e /erson to &%om
"n instrument so +"te+ is +e#i4ere+ "c'uires t%e tit#e t%ereto "s o$
t%e +"te o$ +e#i4er,.
Sec. 16. When date may be inserted. 3 W%ere "n instrument
e1/resse+ to e /","#e "t " $i1e+ /erio+ "$ter +"te is issue+
un+"te+0 or &%ere t%e "cce/t"nce o$ "n instrument /","#e "t "
$i1e+ /erio+ "$ter si!%t is un+"te+0 "n, %o#+er m", insert t%erein t%e
true +"te o$ issue or "cce/t"nce0 "n+ t%e instrument s%"## e
/","#e "ccor+in!#,. T%e insertion o$ " &ron! +"te +oes not "4oi+
t%e instrument in t%e %"n+s o$ " suse'uent %o#+er in +ue course.
ut "s to %im0 t%e +"te so inserte+ is to e re!"r+e+ "s t%e true +"te.
Sec. 17. !lan"s; when may be filled. 3 W%ere t%e instrument is
&"ntin! in "n, m"teri"# /"rticu#"r0 t%e /erson in /ossession t%ereo$
%"s " /rim" $"cie "ut%orit, to com/#ete it , $i##in! u/ t%e #"n-s
t%erein. An+ " si!n"ture on " #"n- /"/er +e#i4ere+ , t%e /erson
m"-in! t%e si!n"ture in or+er t%"t t%e /"/er m", e con4erte+ into "
ne!oti"#e instrument o/er"tes "s " /rim" $"cie "ut%orit, to $i## it u/
"s suc% $or "n, "mount. In or+er0 %o&e4er0 t%"t "n, suc% instrument
&%en com/#ete+ m", e en$orce+ "!"inst "n, /erson &%o ec"me
" /"rt, t%ereto /rior to its com/#etion0 it must e $i##e+ u/ strict#, in
"ccor+"nce &it% t%e "ut%orit, !i4en "n+ &it%in " re"son"#e time.
But i$ "n, suc% instrument0 "$ter com/#etion0 is ne!oti"te+ to " %o#+er
in +ue course0 it is 4"#i+ "n+ e$$ectu"# $or "## /ur/oses in %is %"n+s0
"n+ %e m", en$orce it "s i$ it %"+ een $i##e+ u/ strict#, in "ccor+"nce
&it% t%e "ut%orit, !i4en "n+ &it%in " re"son"#e time.
Sec. 18. #ncomplete instrument not delivered. 3 W%ere "n incom/#ete
instrument %"s not een +e#i4ere+0 it &i## not0 i$ com/#ete+ "n+
ne!oti"te+ &it%out "ut%orit,0 e " 4"#i+ contr"ct in t%e %"n+s o$ "n,
%o#+er0 "s "!"inst "n, /erson &%ose si!n"ture &"s /#"ce+ t%ereon
e$ore +e#i4er,.
2 | P a g e
Act No. 2031 Ne"ot#ab$e I%&tru'e%t& La(
Sec. 1;. Delivery; when effectual; when presumed. - E4er, contr"ct
on " ne!oti"#e instrument is incom/#ete "n+ re4oc"#e unti# +e#i4er,
o$ t%e instrument $or t%e /ur/ose o$ !i4in! e$$ect t%ereto. As et&een
imme+i"te /"rties "n+ "s re!"r+s " remote /"rt, ot%er t%"n " %o#+er
in +ue course0 t%e +e#i4er,0 in or+er to e e$$ectu"#0 must e m"+e
eit%er , or un+er t%e "ut%orit, o$ t%e /"rt, m"-in!0 +r"&in!0
"cce/tin!0 or in+orsin!0 "s t%e c"se m", e. "n+0 in suc% c"se0 t%e
+e#i4er, m", e s%o&n to %"4e een con+ition"#0 or $or " s/eci"#
/ur/ose on#,0 "n+ not $or t%e /ur/ose o$ tr"ns$errin! t%e /ro/ert, in
t%e instrument. But &%ere t%e instrument is in t%e %"n+s o$ " %o#+er
in +ue course0 " 4"#i+ +e#i4er, t%ereo$ , "## /"rties /rior to %im so "s
to m"-e t%em #i"#e to %im is conc#usi4e#, /resume+. An+ &%ere t%e
instrument is no #on!er in t%e /ossession o$ " /"rt, &%ose si!n"ture
"//e"rs t%ereon0 " 4"#i+ "n+ intention"# +e#i4er, , %im is /resume+
unti# t%e contr"r, is /ro4e+.
Sec. 1<. $onstruction where instrument is ambiguous. 3 W%ere t%e
#"n!u"!e o$ t%e instrument is "mi!uous or t%ere "re omissions
t%erein0 t%e $o##o&in! ru#es o$ construction "//#,(
)"* W%ere t%e sum /","#e is e1/resse+ in &or+s "n+ "#so in $i!ures
"n+ t%ere is " +iscre/"nc, et&een t%e t&o0 t%e sum +enote+ , t%e
&or+s is t%e sum /","#e. ut i$ t%e &or+s "re "mi!uous or
uncert"in0 re$erence m", e %"+ to t%e $i!ures to $i1 t%e "mount.
)* W%ere t%e instrument /ro4i+es $or t%e /",ment o$ interest0
&it%out s/eci$,in! t%e +"te $rom &%ic% interest is to run0 t%e interest
runs $rom t%e +"te o$ t%e instrument0 "n+ i$ t%e instrument is
un+"te+0 $rom t%e issue t%ereo$.
)c* W%ere t%e instrument is not +"te+0 it &i## e consi+ere+ to e
+"te+ "s o$ t%e time it &"s issue+.
)+* W%ere t%ere is " con$#ict et&een t%e &ritten "n+ /rinte+
/ro4isions o$ t%e instrument0 t%e &ritten /ro4isions /re4"i#.
)e* W%ere t%e instrument is so "mi!uous t%"t t%ere is +out
&%et%er it is " i## or note0 t%e %o#+er m", tre"t it "s eit%er "t %is
e#ection.
)$* W%ere " si!n"ture is so /#"ce+ u/on t%e instrument t%"t it is not
c#e"r in &%"t c"/"cit, t%e /erson m"-in! t%e s"me inten+e+ to si!n0
%e is to e +eeme+ "n in+orser.
)!* W%ere "n instrument cont"inin! t%e &or+ %# promise to pay% is
si!ne+ , t&o or more /ersons0 t%e, "re +eeme+ to e :oint#, "n+
se4er"##, #i"#e t%ereon.
Sec. 1=. &iability of person signing in trade or assumed name. 3 No
/erson is #i"#e on t%e instrument &%ose si!n"ture +oes not "//e"r
t%ereon0 e1ce/t "s %erein ot%er&ise e1/ress#, /ro4i+e+. But one
&%o si!ns in " tr"+e or "ssume+ n"me &i## e #i"#e to t%e s"me
e1tent "s i$ %e %"+ si!ne+ in %is o&n n"me.
Sec. 1>. 'ignature by agent; authority; how shown. 3 T%e si!n"ture
o$ "n, /"rt, m", e m"+e , " +u#, "ut%ori9e+ "!ent. No /"rticu#"r
$orm o$ "//ointment is necess"r, $or t%is /ur/ose. "n+ t%e "ut%orit,
o$ t%e "!ent m", e est"#is%e+ "s in ot%er c"ses o$ "!enc,.
Sec. 2?. &iability of person signing as agent and so forth. 3 W%ere
t%e instrument cont"ins or " /erson "++s to %is si!n"ture &or+s
in+ic"tin! t%"t %e si!ns $or or on e%"#$ o$ " /rinci/"# or in "
re/resent"ti4e c"/"cit,0 %e is not #i"#e on t%e instrument i$ %e &"s
+u#, "ut%ori9e+. ut t%e mere "++ition o$ &or+s +escriin! %im "s "n
"!ent0 or "s $i##in! " re/resent"ti4e c%"r"cter0 &it%out +isc#osin! %is
/rinci/"#0 +oes not e1em/t %im $rom /erson"# #i"i#it,.
Sec. 21. 'ignature by procuration; effect of. 3 A si!n"ture ,
%procuration% o/er"tes "s notice t%"t t%e "!ent %"s ut " #imite+
"ut%orit, to si!n0 "n+ t%e /rinci/"# is oun+ on#, in c"se t%e "!ent in
so si!nin! "cte+ &it%in t%e "ctu"# #imits o$ %is "ut%orit,.
Sec. 22. (ffect of indorsement by infant or corporation.- T%e
in+orsement or "ssi!nment o$ t%e instrument , " cor/or"tion or ,
"n in$"nt /"sses t%e /ro/ert, t%erein0 not&it%st"n+in! t%"t $rom &"nt
o$ c"/"cit,0 t%e cor/or"tion or in$"nt m", incur no #i"i#it, t%ereon.
Sec. 26. Forged signature; effect of. 3 W%en " si!n"ture is $or!e+ or
m"+e &it%out t%e "ut%orit, o$ t%e /erson &%ose si!n"ture it /ur/orts
to e0 it is &%o##, ino/er"ti4e0 "n+ no ri!%t to ret"in t%e instrument0 or
to !i4e " +isc%"r!e t%ere$or0 or to en$orce /",ment t%ereo$ "!"inst
"n, /"rt, t%ereto0 c"n e "c'uire+ t%rou!% or un+er suc% si!n"ture0
un#ess t%e /"rt, "!"inst &%om it is sou!%t to en$orce suc% ri!%t is
/rec#u+e+ $rom settin! u/ t%e $or!er, or &"nt o$ "ut%orit,.
II. @ONSIDERATION
Sec. 27. )resumption of consideration. 3 E4er, ne!oti"#e
instrument is +eeme+ prima facie to %"4e een issue+ $or " 4"#u"#e
consi+er"tion. "n+ e4er, /erson &%ose si!n"ture "//e"rs t%ereon
to %"4e ecome " /"rt, t%ereto $or 4"#ue.
Sec. 28. *alue what constitutes. A B"#ue is "n, consi+er"tion
su$$icient to su//ort " sim/#e contr"ct. An "ntece+ent or /re3e1istin!
3 | P a g e
Act No. 2031 Ne"ot#ab$e I%&tru'e%t& La(
+et constitutes 4"#ue. "n+ is +eeme+ suc% &%et%er t%e instrument
is /","#e on +em"n+ or "t " $uture time.
Sec. 2;. What constitutes holder for value. 3 W%ere 4"#ue %"s "t "n,
time een !i4en $or t%e instrument0 t%e %o#+er is +eeme+ " %o#+er $or
4"#ue in res/ect to "## /"rties &%o ecome suc% /rior to t%"t time.
Sec. 2<. W%en #ien on instrument constitutes %o#+er $or 4"#ue. A
W%ere t%e %o#+er %"s " #ien on t%e instrument "risin! eit%er $rom
contr"ct or , im/#ic"tion o$ #"&0 %e is +eeme+ " %o#+er $or 4"#ue to
t%e e1tent o$ %is #ien.
Sec. 2=. (ffect of want of consideration. - Asence or $"i#ure o$
consi+er"tion is " m"tter o$ +e$ense "s "!"inst "n, /erson not "
%o#+er in +ue course. "n+ /"rti"# $"i#ure o$ consi+er"tion is " +e$ense
/ro t"nto0 &%et%er t%e $"i#ure is "n "scert"ine+ "n+ #i'ui+"te+
"mount or ot%er&ise.
Sec. 2>. &iability of accommodation party. 3 An "ccommo+"tion /"rt,
is one &%o %"s si!ne+ t%e instrument "s m"-er0 +r"&er0 "cce/tor0 or
in+orser0 &it%out recei4in! 4"#ue t%ere$or0 "n+ $or t%e /ur/ose o$
#en+in! %is n"me to some ot%er /erson. Suc% " /erson is #i"#e on
t%e instrument to " %o#+er $or 4"#ue0 not&it%st"n+in! suc% %o#+er0 "t
t%e time o$ t"-in! t%e instrument0 -ne& %im to e on#, "n
"ccommo+"tion /"rt,.
III. NEGOTIATION
Sec. 6?. What constitutes negotiation. 3 An instrument is ne!oti"te+
&%en it is tr"ns$erre+ $rom one /erson to "not%er in suc% m"nner "s
to constitute t%e tr"ns$eree t%e %o#+er t%ereo$. I$ /","#e to e"rer0 it
is ne!oti"te+ , +e#i4er,. i$ /","#e to or+er0 it is ne!oti"te+ , t%e
in+orsement o$ t%e %o#+er "n+ com/#ete+ , +e#i4er,.
Sec. 61. #ndorsement; how made. - T%e in+orsement must e &ritten
on t%e instrument itse#$ or u/on " /"/er "tt"c%e+ t%ereto. T%e
si!n"ture o$ t%e in+orser0 &it%out "++ition"# &or+s0 is " su$$icient
in+orsement.
Sec. 62. #ndorsement must be of entire instrument. - T%e
in+orsement must e "n in+orsement o$ t%e entire instrument. An
in+orsement &%ic% /ur/orts to tr"ns$er to t%e in+orsee " /"rt on#, o$
t%e "mount /","#e0 or &%ic% /ur/orts to tr"ns$er t%e instrument to
t&o or more in+orsees se4er"##,0 +oes not o/er"te "s " ne!oti"tion
o$ t%e instrument. But &%ere t%e instrument %"s een /"i+ in /"rt0 it
m", e in+orse+ "s to t%e resi+ue.
Sec. 66. +inds of indorsement. 3 An in+orsement m", e eit%er
s/eci"# or in #"n-. "n+ it m", "#so e eit%er restricti4e or 'u"#i$ie+ or
con+ition"#.
Sec. 67. 'pecial indorsement; indorsement in blan". 3 A s/eci"#
in+orsement s/eci$ies t%e /erson to &%om0 or to &%ose or+er0 t%e
instrument is to e /","#e0 "n+ t%e in+orsement o$ suc% in+orsee is
necess"r, to t%e $urt%er ne!oti"tion o$ t%e instrument. An
in+orsement in #"n- s/eci$ies no in+orsee0 "n+ "n instrument so
in+orse+ is /","#e to e"rer0 "n+ m", e ne!oti"te+ , +e#i4er,.
Sec. 68. !lan" indorsement; how changed to special indorsement. 3
T%e %o#+er m", con4ert " #"n- in+orsement into " s/eci"#
in+orsement , &ritin! o4er t%e si!n"ture o$ t%e in+orser in #"n-
"n, contr"ct consistent &it% t%e c%"r"cter o$ t%e in+orsement.
Sec. 6;. When indorsement restrictive. 3 An in+orsement is
restricti4e &%ic% eit%er(
)"* Pro%iits t%e $urt%er ne!oti"tion o$ t%e instrument. or
)* @onstitutes t%e in+orsee t%e "!ent o$ t%e in+orser. or
)c* Bests t%e tit#e in t%e in+orsee in trust $or or to t%e use o$ some
ot%er /ersons.
But t%e mere "sence o$ &or+s im/#,in! /o&er to ne!oti"te +oes not
m"-e "n in+orsement restricti4e.
Sec. 6<. (ffect of restrictive indorsement; rights of indorsee. 3 A
restricti4e in+orsement con$ers u/on t%e in+orsee t%e ri!%t(
)"* to recei4e /",ment o$ t%e instrument.
)* to rin! "n, "ction t%ereon t%"t t%e in+orser cou#+ rin!.
)c* to tr"ns$er %is ri!%ts "s suc% in+orsee0 &%ere t%e $orm o$ t%e
in+orsement "ut%ori9es %im to +o so.
But "## suse'uent in+orsees "c'uire on#, t%e tit#e o$ t%e $irst
in+orsee un+er t%e restricti4e in+orsement.
Sec. 6=. ,ualified indorsement. 3 A 'u"#i$ie+ in+orsement constitutes
t%e in+orser " mere "ssi!nor o$ t%e tit#e to t%e instrument. It m", e
m"+e , "++in! to t%e in+orser5s si!n"ture t%e &or+s C&it%out
recourseC or "n, &or+s o$ simi#"r im/ort. Suc% "n in+orsement +oes
not im/"ir t%e ne!oti"#e c%"r"cter o$ t%e instrument.
Sec. 6>. $onditional indorsement. - W%ere "n in+orsement is
con+ition"#0 t%e /"rt, re'uire+ to /", t%e instrument m", +isre!"r+
t%e con+ition "n+ m"-e /",ment to t%e in+orsee or %is tr"ns$eree
&%et%er t%e con+ition %"s een $u#$i##e+ or not. But "n, /erson to
4 | P a g e
Act No. 2031 Ne"ot#ab$e I%&tru'e%t& La(
&%om "n instrument so in+orse+ is ne!oti"te+ &i## %o#+ t%e s"me0 or
t%e /rocee+s t%ereo$0 su:ect to t%e ri!%ts o$ t%e /erson in+orsin!
con+ition"##,.
Sec. 7?. #ndorsement of instrument payable to bearer. 3 W%ere "n
instrument0 /","#e to e"rer0 is in+orse+ s/eci"##,0 it m",
ne4ert%e#ess e $urt%er ne!oti"te+ , +e#i4er,. ut t%e /erson
in+orsin! s/eci"##, is #i"#e "s in+orser to on#, suc% %o#+ers "s m"-e
tit#e t%rou!% %is in+orsement.
Sec. 71. #ndorsement where payable to two or more persons. 3
W%ere "n instrument is /","#e to t%e or+er o$ t&o or more /",ees
or in+orsees &%o "re not /"rtners0 "## must in+orse un#ess t%e one
in+orsin! %"s "ut%orit, to in+orse $or t%e ot%ers.
Sec. 72. (ffect of instrument drawn or indorsed to a person as
cashier. 3 W%ere "n instrument is +r"&n or in+orse+ to " /erson "s
%cashier% or ot%er $isc"# o$$icer o$ " "n- or cor/or"tion0 it is +eeme+
/rim" $"cie to e /","#e to t%e "n- or cor/or"tion o$ &%ic% %e is
suc% o$$icer0 "n+ m", e ne!oti"te+ , eit%er t%e in+orsement o$ t%e
"n- or cor/or"tion or t%e in+orsement o$ t%e o$$icer.
Sec. 76. #ndorsement where name is misspelled and so forth. 3
W%ere t%e n"me o$ " /",ee or in+orsee is &ron!#, +esi!n"te+ or
miss/e##e+0 %e m", in+orse t%e instrument "s t%erein +escrie+
"++in!0 i$ %e t%in-s $it0 %is /ro/er si!n"ture.
Sec. 77. #ndorsement in representative capacity. 3 W%ere "n, /erson
is un+er o#i!"tion to in+orse in " re/resent"ti4e c"/"cit,0 %e m",
in+orse in suc% terms "s to ne!"ti4e /erson"# #i"i#it,. ro#es 4irtu"#
#"& #ir"r,
Sec. 78. Time of indorsement; presumption. 3 E1ce/t &%ere "n
in+orsement e"rs +"te "$ter t%e m"turit, o$ t%e instrument0 e4er,
ne!oti"tion is +eeme+ /rim" $"cie to %"4e een e$$ecte+ e$ore t%e
instrument &"s o4er+ue.
Sec. 7;. )lace of indorsement; presumption. 3 E1ce/t &%ere t%e
contr"r, "//e"rs0 e4er, in+orsement is /resume+ /rim" $"cie to
%"4e een m"+e "t t%e /#"ce &%ere t%e instrument is +"te+.
Sec. 7<. $ontinuation of negotiable character. - An instrument
ne!oti"#e in its ori!in continues to e ne!oti"#e unti# it %"s een
restricti4e#, in+orse+ or +isc%"r!e+ , /",ment or ot%er&ise.
Sec. 7=. 'tri"ing out indorsement. 3 T%e %o#+er m", "t "n, time
stri-e out "n, in+orsement &%ic% is not necess"r, to %is tit#e. T%e
in+orser &%ose in+orsement is struc- out0 "n+ "## in+orsers
suse'uent to %im0 "re t%ere, re#ie4e+ $rom #i"i#it, on t%e
Sec. 7>. Transfer without indorsement; effect of. 3 W%ere t%e %o#+er
o$ "n instrument /","#e to %is or+er tr"ns$ers it $or 4"#ue &it%out
in+orsin! it0 t%e tr"ns$er 4ests in t%e tr"ns$eree suc% tit#e "s t%e
tr"ns$eror %"+ t%erein0 "n+ t%e tr"ns$eree "c'uires in "++ition0 t%e
ri!%t to %"4e t%e in+orsement o$ t%e tr"ns$eror. But $or t%e /ur/ose o$
+eterminin! &%et%er t%e tr"ns$eree is " %o#+er in +ue course0 t%e
ne!oti"tion t"-es e$$ect "s o$ t%e time &%en t%e in+orsement is
"ctu"##, m"+e.
Sec. 8?. When prior party may negotiate instrument. 3 W%ere "n
instrument is ne!oti"te+ "c- to " /rior /"rt,0 suc% /"rt, m",0
su:ect to t%e /ro4isions o$ t%is Act0 reissue "n+ $urt%er ne!oti"#e
t%e s"me. But %e is not entit#e+ to en$orce /",ment t%ereo$ "!"inst
"n, inter4enin! /"rt, to &%om %e &"s /erson"##, #i"#e.
IB. RIGHTS OF THE HOLDER
Sec. 81. -ight of holder to sue; payment. 3 T%e %o#+er o$ "
ne!oti"#e instrument m", to sue t%ereon in %is o&n n"me. "n+
/",ment to %im in +ue course +isc%"r!es t%e instrument.
Sec. 82. What constitutes a holder in due course. 3 A %o#+er in +ue
course is " %o#+er &%o %"s t"-en t%e instrument un+er t%e $o##o&in!
con+itions(
)"* T%"t it is com/#ete "n+ re!u#"r u/on its $"ce.
)* T%"t %e ec"me t%e %o#+er o$ it e$ore it &"s o4er+ue0 "n+
&it%out notice t%"t it %"s een /re4ious#, +is%onore+0 i$ suc% &"s t%e
$"ct.
)c* T%"t %e too- it in !oo+ $"it% "n+ $or 4"#ue.
)+* T%"t "t t%e time it &"s ne!oti"te+ to %im0 %e %"+ no notice o$ "n,
in$irmit, in t%e instrument or +e$ect in t%e tit#e o$ t%e /erson
ne!oti"tin! it.
Sec. 86. When person not deemed holder in due course. - W%ere "n
instrument /","#e on +em"n+ is ne!oti"te+ on "n unre"son"#e
#en!t% o$ time "$ter its issue0 t%e %o#+er is not +eeme+ " %o#+er in
+ue course.
Sec. 87. .otice before full amount is paid. 3 W%ere t%e tr"ns$eree
recei4es notice o$ "n, in$irmit, in t%e instrument or +e$ect in t%e tit#e
o$ t%e /erson ne!oti"tin! t%e s"me e$ore %e %"s /"i+ t%e $u##
"mount "!ree+ to e /"i+ t%ere$or0 %e &i## e +eeme+ " %o#+er in
+ue course on#, to t%e e1tent o$ t%e "mount t%ere$ore /"i+ , %im.
Sec. 88. When title defective. - T%e tit#e o$ " /erson &%o ne!oti"tes
"n instrument is +e$ecti4e &it%in t%e me"nin! o$ t%is Act &%en %e
5 | P a g e
Act No. 2031 Ne"ot#ab$e I%&tru'e%t& La(
ot"ine+ t%e instrument0 or "n, si!n"ture t%ereto0 , $r"u+0 +uress0
or $orce "n+ $e"r0 or ot%er un#"&$u# me"ns0 or $or "n i##e!"#
consi+er"tion0 or &%en %e ne!oti"tes it in re"c% o$ $"it%0 or un+er
suc% circumst"nces "s "mount to " $r"u+.
Sec. 8;. What constitutes notice of defect. 3 To constitutes notice o$
"n in$irmit, in t%e instrument or +e$ect in t%e tit#e o$ t%e /erson
ne!oti"tin! t%e s"me0 t%e /erson to &%om it is ne!oti"te+ must %"4e
%"+ "ctu"# -no&#e+!e o$ t%e in$irmit, or +e$ect0 or -no&#e+!e o$ suc%
$"cts t%"t %is "ction in t"-in! t%e instrument "mounte+ to "+ $"it%.
Sec. 8<. -ights of holder in due course. 3 A %o#+er in +ue course
%o#+s t%e instrument $ree $rom "n, +e$ect o$ tit#e o$ /rior /"rties0 "n+
$ree $rom +e$enses "4"i#"#e to /rior /"rties "mon! t%emse#4es0 "n+
m", en$orce /",ment o$ t%e instrument $or t%e $u## "mount t%ereo$
"!"inst "## /"rties #i"#e t%ereon. ro#es 4irtu"# #"& #ir"r,
Sec. 8=. When sub/ect to original defense. - In t%e %"n+s o$ "n,
%o#+er ot%er t%"n " %o#+er in +ue course0 " ne!oti"#e instrument is
su:ect to t%e s"me +e$enses "s i$ it &ere non3ne!oti"#e. But "
%o#+er &%o +eri4es %is tit#e t%rou!% " %o#+er in +ue course0 "n+ &%o
is not %imse#$ " /"rt, to "n, $r"u+ or i##e!"#it, "$$ectin! t%e
instrument0 %"s "## t%e ri!%ts o$ suc% $ormer %o#+er in res/ect o$ "##
/"rties /rior to t%e #"tter.
Sec. 8>. Who is deemed holder in due course. 3 E4er, %o#+er is
+eeme+ /rim" $"cie to e " %o#+er in +ue course. ut &%en it is
s%o&n t%"t t%e tit#e o$ "n, /erson &%o %"s ne!oti"te+ t%e instrument
&"s +e$ecti4e0 t%e ur+en is on t%e %o#+er to /ro4e t%"t %e or some
/erson un+er &%om %e c#"ims "c'uire+ t%e tit#e "s %o#+er in +ue
course. But t%e #"st3mentione+ ru#e +oes not "//#, in $"4or o$ " /"rt,
&%o ec"me oun+ on t%e instrument /rior to t%e "c'uisition o$ suc%
+e$ecti4e tit#e.
B. LIABILITIES OF PARTIES
Sec. ;?. &iability of ma"er. 3 T%e m"-er o$ " ne!oti"#e instrument0
, m"-in! it0 en!"!es t%"t %e &i## /", it "ccor+in! to its tenor0 "n+
"+mits t%e e1istence o$ t%e /",ee "n+ %is t%en c"/"cit, to in+orse.
Sec. ;1. &iability of drawer. 3 T%e +r"&er , +r"&in! t%e instrument
"+mits t%e e1istence o$ t%e /",ee "n+ %is t%en c"/"cit, to in+orse.
"n+ en!"!es t%"t0 on +ue /resentment0 t%e instrument &i## e
"cce/te+ or /"i+0 or ot%0 "ccor+in! to its tenor0 "n+ t%"t i$ it e
+is%onore+ "n+ t%e necess"r, /rocee+in!s on +is%onor e +u#,
t"-en0 %e &i## /", t%e "mount t%ereo$ to t%e %o#+er or to "n,
suse'uent in+orser &%o m", e com/e##e+ to /", it. But t%e +r"&er
m", insert in t%e instrument "n e1/ress sti/u#"tion ne!"ti4in! or
#imitin! %is o&n #i"i#it, to t%e %o#+er.
Sec. ;2. &iability of acceptor. 3 T%e "cce/tor0 , "cce/tin! t%e
instrument0 en!"!es t%"t %e &i## /", it "ccor+in! to t%e tenor o$ %is
"cce/t"nce "n+ "+mits(
)"* T%e e1istence o$ t%e +r"&er0 t%e !enuineness o$ %is si!n"ture0
"n+ %is c"/"cit, "n+ "ut%orit, to +r"& t%e instrument. "n+
)* T%e e1istence o$ t%e /",ee "n+ %is t%en c"/"cit, to in+orse.
Sec. ;6. When a person deemed indorser. 3 A /erson /#"cin! %is
si!n"ture u/on "n instrument ot%er&ise t%"n "s m"-er0 +r"&er0 or
"cce/tor0 is +eeme+ to e in+orser un#ess %e c#e"r#, in+ic"tes ,
"//ro/ri"te &or+s %is intention to e oun+ in some ot%er c"/"cit,.
Sec. ;7. &iability of irregular indorser. 3 W%ere " /erson0 not
ot%er&ise " /"rt, to "n instrument0 /#"ces t%ereon %is si!n"ture in
#"n- e$ore +e#i4er,0 %e is #i"#e "s in+orser0 in "ccor+"nce &it% t%e
$o##o&in! ru#es(
)"* I$ t%e instrument is /","#e to t%e or+er o$ " t%ir+ /erson0 %e is
#i"#e to t%e /",ee "n+ to "## suse'uent /"rties.
)* I$ t%e instrument is /","#e to t%e or+er o$ t%e m"-er or +r"&er0
or is /","#e to e"rer0 %e is #i"#e to "## /"rties suse'uent to t%e
m"-er or +r"&er.
)c* I$ %e si!ns $or t%e "ccommo+"tion o$ t%e /",ee0 %e is #i"#e to "##
/"rties suse'uent to t%e /",ee.
Sec. ;8. Warranty where negotiation by delivery and so forth. A
E4er, /erson ne!oti"tin! "n instrument , +e#i4er, or , " 'u"#i$ie+
in+orsement &"rr"nts(
)"* T%"t t%e instrument is !enuine "n+ in "## res/ects &%"t it /ur/orts
to e.
)* T%"t %e %"s " !oo+ tit#e to it.
)c* T%"t "## /rior /"rties %"+ c"/"cit, to contr"ct.
)+* T%"t %e %"s no -no&#e+!e o$ "n, $"ct &%ic% &ou#+ im/"ir t%e
4"#i+it, o$ t%e instrument or ren+er it 4"#ue#ess.
But &%en t%e ne!oti"tion is , +e#i4er, on#,0 t%e &"rr"nt, e1ten+s in
$"4or o$ no %o#+er ot%er t%"n t%e imme+i"te tr"ns$eree.
T%e /ro4isions o$ su+i4ision )c* o$ t%is section +o not "//#, to "
/erson ne!oti"tin! /u#ic or cor/or"tion securities ot%er t%"n i##s
"n+ notes.
6 | P a g e
Act No. 2031 Ne"ot#ab$e I%&tru'e%t& La(
Sec. ;;. &iability of general indorser. 3 E4er, in+orser &%o in+orses
&it%out 'u"#i$ic"tion0 &"rr"nts to "## suse'uent %o#+ers in +ue
course(
)"* T%e m"tters "n+ t%in!s mentione+ in su+i4isions )"*0 )*0 "n+ )c*
o$ t%e ne1t /rece+in! section. "n+
)* T%"t t%e instrument is0 "t t%e time o$ %is in+orsement0 4"#i+ "n+
susistin!.
An+0 in "++ition0 %e en!"!es t%"t0 on +ue /resentment0 it s%"## e
"cce/te+ or /"i+0 or ot%0 "s t%e c"se m", e0 "ccor+in! to its tenor0
"n+ t%"t i$ it e +is%onore+ "n+ t%e necess"r, /rocee+in!s on
+is%onor e +u#, t"-en0 %e &i## /", t%e "mount t%ereo$ to t%e %o#+er0
or to "n, suse'uent in+orser &%o m", e com/e##e+ to /", it.
Sec. ;<. &iability of indorser where paper negotiable by delivery. A
W%ere " /erson /#"ces %is in+orsement on "n instrument ne!oti"#e
, +e#i4er,0 %e incurs "## t%e #i"i#it, o$ "n in+orser.
Sec. ;=. Order in which indorsers are liable. 3 As res/ect one
"not%er0 in+orsers "re #i"#e prima facie in t%e or+er in &%ic% t%e,
in+orse. ut e4i+ence is "+missi#e to s%o& t%"t0 "s et&een or
"mon! t%emse#4es0 t%e, %"4e "!ree+ ot%er&ise. Doint /",ees or
:oint in+orsees &%o in+orse "re +eeme+ to in+orse :oint#, "n+
se4er"##,. ro#es 4irtu"# #"& #ir"r,
Sec. ;>. &iability of an agent or bro"er. 3 W%ere " ro-er or ot%er
"!ent ne!oti"tes "n instrument &it%out in+orsement0 %e incurs "##
t%e #i"i#ities /rescrie+ , Section Si1t,3$i4e o$ t%is Act0 un#ess %e
+isc#oses t%e n"me o$ %is /rinci/"# "n+ t%e $"ct t%"t %e is "ctin! on#,
"s "!ent.
BI. PRESENTATION FOR PAEMENT
Sec. <?. (ffect of want of demand on principal debtor. 3 Presentment
$or /",ment is not necess"r, in or+er to c%"r!e t%e /erson /rim"ri#,
#i"#e on t%e instrument. ut i$ t%e instrument is0 , its terms0 /","#e
"t " s/eci"# /#"ce0 "n+ %e is "#e "n+ &i##in! to /", it t%ere "t
m"turit,0 suc% "i#it, "n+ &i##in!ness "re e'ui4"#ent to " ten+er o$
/",ment u/on %is /"rt. But e1ce/t "s %erein ot%er&ise /ro4i+e+0
/resentment $or /",ment is necess"r, in or+er to c%"r!e t%e +r"&er
"n+ in+orsers.
Sec. <1. )resentment where instrument is not payable on demand
and where payable on demand. - W%ere t%e instrument is not
/","#e on +em"n+0 /resentment must e m"+e on t%e +", it $"##s
+ue. W%ere it is /","#e on +em"n+0 /resentment must e m"+e
&it%in " re"son"#e time "$ter its issue0 e1ce/t t%"t in t%e c"se o$ "
i## o$ e1c%"n!e0 /resentment $or /",ment &i## e su$$icient i$ m"+e
&it%in " re"son"#e time "$ter t%e #"st ne!oti"tion t%ereo$.
Sec. <2. What constitutes a sufficient presentment. 3 Presentment
$or /",ment0 to e su$$icient0 must e m"+e(
)"* B, t%e %o#+er0 or , some /erson "ut%ori9e+ to recei4e /",ment
on %is e%"#$.
)* At " re"son"#e %our on " usiness +",.
)c* At " /ro/er /#"ce "s %erein +e$ine+.
)+* To t%e /erson /rim"ri#, #i"#e on t%e instrument0 or i$ %e is "sent
or in"ccessi#e0 to "n, /erson $oun+ "t t%e /#"ce &%ere t%e
/resentment is m"+e.
Sec. <6. )lace of presentment. - Presentment $or /",ment is m"+e
"t t%e /ro/er /#"ce(
)"* W%ere " /#"ce o$ /",ment is s/eci$ie+ in t%e instrument "n+ it is
t%ere /resente+.
)* W%ere no /#"ce o$ /",ment is s/eci$ie+ ut t%e "++ress o$ t%e
/erson to m"-e /",ment is !i4en in t%e instrument "n+ it is t%ere
/resente+.
)c* W%ere no /#"ce o$ /",ment is s/eci$ie+ "n+ no "++ress is !i4en
"n+ t%e instrument is /resente+ "t t%e usu"# /#"ce o$ usiness or
resi+ence o$ t%e /erson to m"-e /",ment.
)+* In "n, ot%er c"se i$ /resente+ to t%e /erson to m"-e /",ment
&%ere4er %e c"n e $oun+0 or i$ /resente+ "t %is #"st -no&n /#"ce o$
usiness or resi+ence.
Sec. <7. #nstrument must be e0hibited. 3 T%e instrument must e
e1%iite+ to t%e /erson $rom &%om /",ment is +em"n+e+0 "n+ &%en
it is /"i+0 must e +e#i4ere+ u/ to t%e /"rt, /",in! it.
Sec. <8. )resentment where instrument payable at ban". 3 W%ere
t%e instrument is /","#e "t " "n-0 /resentment $or /",ment must
e m"+e +urin! "n-in! %ours0 un#ess t%e /erson to m"-e /",ment
%"s no $un+s t%ere to meet it "t "n, time +urin! t%e +",0 in &%ic%
c"se /resentment "t "n, %our e$ore t%e "n- is c#ose+ on t%"t +",
is su$$icient.
Sec. <;. )resentment where principal debtor is dead. 3 W%ere t%e
/erson /rim"ri#, #i"#e on t%e instrument is +e"+ "n+ no /#"ce o$
7 | P a g e
Act No. 2031 Ne"ot#ab$e I%&tru'e%t& La(
/",ment is s/eci$ie+0 /resentment $or /",ment must e m"+e to %is
/erson"# re/resent"ti4e0 i$ suc% t%ere e0 "n+ i$0 &it% t%e e1ercise o$
re"son"#e +i#i!ence0 %e c"n e $oun+.
Sec. <<. )resentment to persons liable as partners. 3 W%ere t%e
/ersons /rim"ri#, #i"#e on t%e instrument "re #i"#e "s /"rtners "n+
no /#"ce o$ /",ment is s/eci$ie+0 /resentment $or /",ment m", e
m"+e to "n, one o$ t%em0 e4en t%ou!% t%ere %"s een " +isso#ution
o$ t%e $irm.
Sec. <=. )resentment to /oint debtors. 3 W%ere t%ere "re se4er"#
/ersons0 not /"rtners0 /rim"ri#, #i"#e on t%e instrument "n+ no /#"ce
o$ /",ment is s/eci$ie+0 /resentment must e m"+e to t%em "##.
Sec. <>. When presentment not re1uired to charge the drawer. -
Presentment $or /",ment is not re'uire+ in or+er to c%"r!e t%e
+r"&er &%ere %e %"s no ri!%t to e1/ect or re'uire t%"t t%e +r"&ee or
"cce/tor &i## /", t%e instrument.
Sec. =?. When presentment not re1uired to charge the indorser. -
Presentment is not re'uire+ in or+er to c%"r!e "n in+orser &%ere t%e
instrument &"s m"+e or "cce/te+ $or %is "ccommo+"tion "n+ %e
%"s no re"son to e1/ect t%"t t%e instrument &i## e /"i+ i$ /resente+.
Sec. =1. When delay in ma"ing presentment is e0cused. 3 De#", in
m"-in! /resentment $or /",ment is e1cuse+ &%en t%e +e#", is
c"use+ , circumst"nces e,on+ t%e contro# o$ t%e %o#+er "n+ not
im/ut"#e to %is +e$"u#t0 miscon+uct0 or ne!#i!ence. W%en t%e c"use
o$ +e#", ce"ses to o/er"te0 /resentment must e m"+e &it%
re"son"#e +i#i!ence.
Sec. =2. When presentment for payment is e0cused. 3 Presentment
$or /",ment is e1cuse+(
)"* W%ere0 "$ter t%e e1ercise o$ re"son"#e +i#i!ence0 /resentment0
"s re'uire+ , t%is Act0 c"nnot e m"+e.
)* W%ere t%e +r"&ee is " $ictitious /erson.
)c* B, &"i4er o$ /resentment0 e1/ress or im/#ie+.
Sec. =6. When instrument dishonored by non-payment. 3 T%e
instrument is +is%onore+ , non3/",ment &%en(
)"* It is +u#, /resente+ $or /",ment "n+ /",ment is re$use+ or
c"nnot e ot"ine+. or
)* Presentment is e1cuse+ "n+ t%e instrument is o4er+ue "n+
un/"i+.
Sec. =7. &iability of person secondarily liable when instrument
dishonored. 3 Su:ect to t%e /ro4isions o$ t%is Act0 &%en t%e
instrument is +is%onore+ , non3/",ment0 "n imme+i"te ri!%t o$
recourse to "## /"rties secon+"ri#, #i"#e t%ereon "ccrues to t%e
%o#+er. ro#es 4irtu"# #"& #ir"r,
Sec. =8. Time of maturity. 3 E4er, ne!oti"#e instrument is /","#e
"t t%e time $i1e+ t%erein &it%out !r"ce. W%en t%e +", o$ m"turit, $"##s
u/on Sun+", or " %o#i+",0 t%e instruments $"##in! +ue or ecomin!
/","#e on S"tur+", "re to e /resente+ $or /",ment on t%e ne1t
succee+in! usiness +", e1ce/t t%"t instruments /","#e on
+em"n+ m",0 "t t%e o/tion o$ t%e %o#+er0 e /resente+ $or /",ment
e$ore t&e#4e o5c#oc- noon on S"tur+", &%en t%"t entire +", is not "
%o#i+",.

Sec. =;. Time; how computed. 3 W%en t%e instrument is /","#e "t "
$i1e+ /erio+ "$ter +"te0 "$ter si!%t0 or "$ter t%"t %"//enin! o$ "
s/eci$ie+ e4ent0 t%e time o$ /",ment is +etermine+ , e1c#u+in! t%e
+", $rom &%ic% t%e time is to e!in to run0 "n+ , inc#u+in! t%e +"te
o$ /",ment.

Sec. =<. -ule where instrument payable at ban". 3 W%ere t%e
instrument is m"+e /","#e "t " "n-0 it is e'ui4"#ent to "n or+er to
t%e "n- to /", t%e s"me $or t%e "ccount o$ t%e /rinci/"# +etor
t%ereon.

Sec. ==. What constitutes payment in due course. 3 P",ment is
m"+e in +ue course &%en it is m"+e "t or "$ter t%e m"turit, o$ t%e
/",ment to t%e %o#+er t%ereo$ in !oo+ $"it% "n+ &it%out notice t%"t
%is tit#e is +e$ecti4e.

BII. NOTI@E OF DISHONOR
Sec. =>. To whom notice of dishonor must be given. - E1ce/t "s
%erein ot%er&ise /ro4i+e+0 &%en " ne!oti"#e instrument %"s een
+is%onore+ , non3"cce/t"nce or non3/",ment0 notice o$ +is%onor
must e !i4en to t%e +r"&er "n+ to e"c% in+orser0 "n+ "n, +r"&er or
in+orser to &%om suc% notice is not !i4en is +isc%"r!e+.

Sec. >?. !y whom given. 3 T%e notice m", e !i4en , or on e%"#$
o$ t%e %o#+er0 or , or on e%"#$ o$ "n, /"rt, to t%e instrument &%o
mi!%t e com/e##e+ to /", it to t%e %o#+er0 "n+ &%o0 u/on t"-in! it
u/0 &ou#+ %"4e " ri!%t to reimursement $rom t%e /"rt, to &%om t%e
notice is !i4en.
8 | P a g e
Act No. 2031 Ne"ot#ab$e I%&tru'e%t& La(

Sec. >1. .otice given by agent. 3 Notice o$ +is%onor m", e !i4en ,
"n, "!ent eit%er in %is o&n n"me or in t%e n"me o$ "n, /"rt, entit#e+
to !i4en notice0 &%et%er t%"t /"rt, e %is /rinci/"# or not.

Sec. >2. (ffect of notice on behalf of holder. 3 W%ere notice is !i4en
, or on e%"#$ o$ t%e %o#+er0 it inures to t%e ene$it o$ "## suse'uent
%o#+ers "n+ "## /rior /"rties &%o %"4e " ri!%t o$ recourse "!"inst t%e
/"rt, to &%om it is !i4en.

Sec. >6. (ffect where notice is given by party entitled thereto. 3
W%ere notice is !i4en , or on e%"#$ o$ " /"rt, entit#e+ to !i4e
notice0 it inures to t%e ene$it o$ t%e %o#+er "n+ "## /"rties
suse'uent to t%e /"rt, to &%om notice is !i4en.

Sec. >7. When agent may give notice. 3 W%ere t%e instrument %"s
een +is%onore+ in t%e %"n+s o$ "n "!ent0 %e m", eit%er %imse#$
!i4e notice to t%e /"rties #i"#e t%ereon0 or %e m", !i4e notice to %is
/rinci/"#. I$ %e !i4es notice to %is /rinci/"#0 %e must +o so &it%in t%e
s"me time "s i$ %e &ere t%e %o#+er0 "n+ t%e /rinci/"#0 u/on t%e
recei/t o$ suc% notice0 %"s %imse#$ t%e s"me time $or !i4in! notice "s
i$ t%e "!ent %"+ een "n in+e/en+ent %o#+er.

Sec. >8. When notice sufficient. 3 A &ritten notice nee+ not e si!ne+
"n+ "n insu$$icient &ritten notice m", e su//#emente+ "n+
4"#i+"te+ , 4er"# communic"tion. A mis+escri/tion o$ t%e
instrument +oes not 4iti"te t%e notice un#ess t%e /"rt, to &%om t%e
notice is !i4en is in $"ct mis#e+ t%ere,.

Sec. >;. Form of notice. 3 T%e notice m", e in &ritin! or mere#, or"#
"n+ m", e !i4en in "n, terms &%ic% su$$icient#, i+enti$, t%e
instrument0 "n+ in+ic"te t%"t it %"s een +is%onore+ , non3
"cce/t"nce or non3/",ment. It m", in "## c"ses e !i4en ,
+e#i4erin! it /erson"##, or t%rou!% t%e m"i#s.

Sec. ><. To whom notice may be given. 3 Notice o$ +is%onor m", e
!i4en eit%er to t%e /"rt, %imse#$ or to %is "!ent in t%"t e%"#$.

Sec. >=. .otice where party is dead. - W%en "n, /"rt, is +e"+ "n+
%is +e"t% is -no&n to t%e /"rt, !i4in! notice0 t%e notice must e
!i4en to " /erson"# re/resent"ti4e0 i$ t%ere e one0 "n+ i$ &it%
re"son"#e +i#i!ence0 %e c"n e $oun+. I$ t%ere e no /erson"#
re/resent"ti4e0 notice m", e sent to t%e #"st resi+ence or #"st /#"ce
o$ usiness o$ t%e +ece"se+.

Sec. >>. .otice to partners. 3 W%ere t%e /"rties to e noti$ie+ "re
/"rtners0 notice to "n, one /"rtner is notice to t%e $irm0 e4en t%ou!%
t%ere %"s een " +isso#ution.

t%em %"s "ut%orit, to recei4e suc% notice $or t%e ot%ers.

Sec. 1?1. .otice to ban"rupt. 3 W%ere " /"rt, %"s een "+:u+!e+ "
"n-ru/t or "n inso#4ent0 or %"s m"+e "n "ssi!nment $or t%e ene$it
o$ cre+itors0 notice m", e !i4en eit%er to t%e /"rt, %imse#$ or to %is
trustee or "ssi!nee.

Sec. 1?2. Time within which notice must be given. 3 Notice m", e
!i4en "s soon "s t%e instrument is +is%onore+ "n+0 un#ess +e#", is
e1cuse+ "s %erein"$ter /ro4i+e+0 must e !i4en &it%in t%e time $i1e+
, t%is Act.

Sec. 1?6. Where parties reside in same place. - W%ere t%e /erson
!i4in! "n+ t%e /erson to recei4e notice resi+e in t%e s"me /#"ce0
notice must e !i4en &it%in t%e $o##o&in! times(
)"* I$ !i4en "t t%e /#"ce o$ usiness o$ t%e /erson to recei4e notice0 it
must e !i4en e$ore t%e c#ose o$ usiness %ours on t%e +",
$o##o&in!.

)* I$ !i4en "t %is resi+ence0 it must e !i4en e$ore t%e usu"# %ours
o$ rest on t%e +", $o##o&in!.

)c* I$ sent , m"i#0 it must e +e/osite+ in t%e /ost o$$ice in time to
re"c% %im in usu"# course on t%e +", $o##o&in!.
Sec. 1?7. Where parties reside in different places. 3 W%ere t%e
/erson !i4in! "n+ t%e /erson to recei4e notice resi+e in +i$$erent
/#"ces0 t%e notice must e !i4en &it%in t%e $o##o&in! times(
)"* I$ sent , m"i#0 it must e +e/osite+ in t%e /ost o$$ice in time to !o
, m"i# t%e +", $o##o&in! t%e +", o$ +is%onor0 or i$ t%ere e no m"i# "t
" con4enient %our on #"st +",0 , t%e ne1t m"i# t%ere"$ter.

)* I$ !i4en ot%er&ise t%"n t%rou!% t%e /ost o$$ice0 t%en &it%in t%e
time t%"t notice &ou#+ %"4e een recei4e+ in +ue course o$ m"i#0 i$ it
%"+ een +e/osite+ in t%e /ost o$$ice &it%in t%e time s/eci$ie+ in t%e
#"st su+i4ision.
Sec. 1?8. When sender deemed to have given due notice. 3 W%ere
notice o$ +is%onor is +u#, "++resse+ "n+ +e/osite+ in t%e /ost o$$ice0
t%e sen+er is +eeme+ to %"4e !i4en +ue notice0 not&it%st"n+in! "n,
misc"rri"!e in t%e m"i#s.

Sec. 1?;. Deposit in post office; what constitutes. 3 Notice is +eeme+
to %"4e een +e/osite+ in t%e /ost3o$$ice &%en +e/osite+ in "n,
r"nc% /ost o$$ice or in "n, #etter o1 un+er t%e contro# o$ t%e /ost3
o$$ice +e/"rtment.

Sec. 1?<. .otice to subse1uent party; time of. 3 W%ere " /"rt,
9 | P a g e
Act No. 2031 Ne"ot#ab$e I%&tru'e%t& La(
recei4es notice o$ +is%onor0 %e %"s0 "$ter t%e recei/t o$ suc% notice0
t%e s"me time $or !i4in! notice to "ntece+ent /"rties t%"t t%e %o#+er
%"s "$ter t%e +is%onor.

Sec. 1?=. Where notice must be sent. 3 W%ere " /"rt, %"s "++e+ "n
"++ress to %is si!n"ture0 notice o$ +is%onor must e sent to t%"t
"++ress. ut i$ %e %"s not !i4en suc% "++ress0 t%en t%e notice must
e sent "s $o##o&s(
)"* Eit%er to t%e /ost3o$$ice ne"rest to %is /#"ce o$ resi+ence or to t%e
/ost3o$$ice &%ere %e is "ccustome+ to recei4e %is #etters. or

)* I$ %e #i4es in one /#"ce "n+ %"s %is /#"ce o$ usiness in "not%er0
notice m", e sent to eit%er /#"ce. or

)c* I$ %e is so:ournin! in "not%er /#"ce0 notice m", e sent to t%e
/#"ce &%ere %e is so so:ournin!.
But &%ere t%e notice is "ctu"##, recei4e+ , t%e /"rt, &it%in t%e time
s/eci$ie+ in t%is Act0 it &i## e su$$icient0 t%ou!% not sent in
"ccor+"nce &it% t%e re'uirement o$ t%is section.
Sec. 1?>. Waiver of notice. 3 Notice o$ +is%onor m", e &"i4e+
eit%er e$ore t%e time o$ !i4in! notice %"s "rri4e+ or "$ter t%e
omission to !i4e +ue notice0 "n+ t%e &"i4er m", e e1/resse+ or
im/#ie+.

Sec. 11?. Whom affected by waiver. 3 W%ere t%e &"i4er is emo+ie+
in t%e instrument itse#$0 it is in+in! u/on "## /"rties. ut0 &%ere it is
&ritten "o4e t%e si!n"ture o$ "n in+orser0 it in+s %im on#,.

Sec. 111. Waiver of protest. - A &"i4er o$ /rotest0 &%et%er in t%e
c"se o$ " $orei!n i## o$ e1c%"n!e or ot%er ne!oti"#e instrument0 is
+eeme+ to e " &"i4er not on#, o$ " $orm"# /rotest ut "#so o$
/resentment "n+ notice o$ +is%onor.

Sec. 112. When notice is dispensed with. 3 Notice o$ +is%onor is
+is/ense+ &it% &%en0 "$ter t%e e1ercise o$ re"son"#e +i#i!ence0 it
c"nnot e !i4en to or +oes not re"c% t%e /"rties sou!%t to e
c%"r!e+.

Sec. 116. Delay in giving notice; how e0cused. 3 De#", in !i4in!
notice o$ +is%onor is e1cuse+ &%en t%e +e#", is c"use+ ,
circumst"nces e,on+ t%e contro# o$ t%e %o#+er "n+ not im/ut"#e to
%is +e$"u#t0 miscon+uct0 or ne!#i!ence. W%en t%e c"use o$ +e#",
ce"ses to o/er"te0 notice must e !i4en &it% re"son"#e +i#i!ence.

Sec. 117. When notice need not be given to drawer. 3 Notice o$
+is%onor is not re'uire+ to e !i4en to t%e +r"&er in eit%er o$ t%e
$o##o&in! c"ses(
)"* W%ere t%e +r"&er "n+ +r"&ee "re t%e s"me /erson.

)* W%en t%e +r"&ee is $ictitious /erson or " /erson not %"4in!
c"/"cit, to contr"ct.

)c* W%en t%e +r"&er is t%e /erson to &%om t%e instrument is
/resente+ $or /",ment.

)+* W%ere t%e +r"&er %"s no ri!%t to e1/ect or re'uire t%"t t%e
+r"&ee or "cce/tor &i## %onor t%e instrument.

)e* W%ere t%e +r"&er %"s counterm"n+e+ /",ment.
Sec. 118. When notice need not be given to indorser. A Notice o$
+is%onor is not re'uire+ to e !i4en to "n in+orser in eit%er o$ t%e
$o##o&in! c"ses(
)"* W%en t%e +r"&ee is " $ictitious /erson or /erson not %"4in!
c"/"cit, to contr"ct0 "n+ t%e in+orser &"s "&"re o$ t%"t $"ct "t t%e
time %e in+orse+ t%e instrument.

)* W%ere t%e in+orser is t%e /erson to &%om t%e instrument is
/resente+ $or /",ment.

)c* W%ere t%e instrument &"s m"+e or "cce/te+ $or %is
"ccommo+"tion.
Sec. 11;. .otice of non-payment where acceptance refused. 3
W%ere +ue notice o$ +is%onor , non3"cce/t"nce %"s een !i4en0
notice o$ " suse'uent +is%onor , non3/",ment is not necess"r,
un#ess in t%e me"ntime t%e instrument %"s een "cce/te+.

Sec. 11<. (ffect of omission to give notice of non-acceptance. 3 An
omission to !i4e notice o$ +is%onor , non3"cce/t"nce +oes not
/re:u+ice t%e ri!%ts o$ " %o#+er in +ue course suse'uent to t%e
omission.

Sec. 11=. When protest need not be made; when must be made. 3
W%ere "n, ne!oti"#e instrument %"s een +is%onore+0 it m", e
/roteste+ $or non3"cce/t"nce or non3/",ment0 "s t%e c"se m", e.
ut /rotest is not re'uire+ e1ce/t in t%e c"se o$ $orei!n i##s o$
e1c%"n!e. ro#es 4irtu"# #"& #ir"r,
BIII. DIS@HARGE OF NEGOTIABLE INSTRUMENTS
10 | P a g e
Act No. 2031 Ne"ot#ab$e I%&tru'e%t& La(
Sec. 11>. #nstrument; how discharged. 3 A ne!oti"#e instrument is
+isc%"r!e+(
)"* B, /",ment in +ue course , or on e%"#$ o$ t%e /rinci/"# +etor.

)* B, /",ment in +ue course , t%e /"rt, "ccommo+"te+0 &%ere
t%e instrument is m"+e or "cce/te+ $or %is "ccommo+"tion.

)c* B, t%e intention"# c"nce##"tion t%ereo$ , t%e %o#+er.

)+* B, "n, ot%er "ct &%ic% &i## +isc%"r!e " sim/#e contr"ct $or t%e
/",ment o$ mone,.

)e* W%en t%e /rinci/"# +etor ecomes t%e %o#+er o$ t%e instrument
"t or "$ter m"turit, in %is o&n ri!%t.
Sec. 12?. When persons secondarily liable on the instrument are
discharged. - A /erson secon+"ri#, #i"#e on t%e instrument is
+isc%"r!e+(
)"* B, "n, "ct &%ic% +isc%"r!es t%e instrument.

)* B, t%e intention"# c"nce##"tion o$ %is si!n"ture , t%e %o#+er.

)c* B, t%e +isc%"r!e o$ " /rior /"rt,.

)+* B, " 4"#i+ ten+er or /",ment m"+e , " /rior /"rt,.

)e* B, " re#e"se o$ t%e /rinci/"# +etor un#ess t%e %o#+er5s ri!%t o$
recourse "!"inst t%e /"rt, secon+"ri#, #i"#e is e1/ress#, reser4e+.

)$* B, "n, "!reement in+in! u/on t%e %o#+er to e1ten+ t%e time o$
/",ment or to /ost/one t%e %o#+er5s ri!%t to en$orce t%e instrument
un#ess m"+e &it% t%e "ssent o$ t%e /"rt, secon+"ri#, #i"#e or un#ess
t%e ri!%t o$ recourse "!"inst suc% /"rt, is e1/ress#, reser4e+.
Sec. 121. -ight of party who discharges instrument. 3 W%ere t%e
instrument is /"i+ , " /"rt, secon+"ri#, #i"#e t%ereon0 it is not
+isc%"r!e+. ut t%e /"rt, so /",in! it is remitte+ to %is $ormer ri!%ts
"s re!"r+ "## /rior /"rties0 "n+ %e m", stri-e out %is o&n "n+ "##
suse'uent in+orsements "n+ "!"inst ne!oti"te t%e instrument0
e1ce/t(
)"* W%ere it is /","#e to t%e or+er o$ " t%ir+ /erson "n+ %"s een
/"i+ , t%e +r"&er. "n+

)* W%ere it &"s m"+e or "cce/te+ $or "ccommo+"tion "n+ %"s
een /"i+ , t%e /"rt, "ccommo+"te+.
Sec. 122. -enunciation by holder. 3 T%e %o#+er m", e1/ress#,
renounce %is ri!%ts "!"inst "n, /"rt, to t%e instrument e$ore0 "t0 or
"$ter its m"turit,. An "so#ute "n+ uncon+ition"# renunci"tion o$ %is
ri!%ts "!"inst t%e /rinci/"# +etor m"+e "t or "$ter t%e m"turit, o$ t%e
instrument +isc%"r!es t%e instrument. But " renunci"tion +oes not
"$$ect t%e ri!%ts o$ " %o#+er in +ue course &it%out notice. A
renunci"tion must e in &ritin! un#ess t%e instrument is +e#i4ere+ u/
to t%e /erson /rim"ri#, #i"#e t%ereon.

Sec. 126. $ancellation; unintentional; burden of proof. 3 A
c"nce##"tion m"+e unintention"##, or un+er " mist"-e or &it%out t%e
"ut%orit, o$ t%e %o#+er0 is ino/er"ti4e ut &%ere "n instrument or "n,
si!n"ture t%ereon "//e"rs to %"4e een c"nce##e+0 t%e ur+en o$
/roo$ #ies on t%e /"rt, &%o "##e!es t%"t t%e c"nce##"tion &"s m"+e
unintention"##, or un+er " mist"-e or &it%out "ut%orit,.

Sec. 127. Alteration of instrument; effect of. 3 W%ere " ne!oti"#e
instrument is m"teri"##, "#tere+ &it%out t%e "ssent o$ "## /"rties #i"#e
t%ereon0 it is "4oi+e+0 e1ce/t "s "!"inst " /"rt, &%o %"s %imse#$
m"+e0 "ut%ori9e+0 or "ssente+ to t%e "#ter"tion "n+ suse'uent
in+orsers.
But &%en "n instrument %"s een m"teri"##, "#tere+ "n+ is in t%e
%"n+s o$ " %o#+er in +ue course not " /"rt, to t%e "#ter"tion0 %e m",
en$orce /",ment t%ereo$ "ccor+in! to its ori!in"# tenor.

Sec. 128. What constitutes a material alteration. - An, "#ter"tion
&%ic% c%"n!es(
)"* T%e +"te.

)* T%e sum /","#e0 eit%er $or /rinci/"# or interest.

)c* T%e time or /#"ce o$ /",ment(

)+* T%e numer or t%e re#"tions o$ t%e /"rties.

)e* T%e me+ium or currenc, in &%ic% /",ment is to e m"+e.

)$* Or &%ic% "++s " /#"ce o$ /",ment &%ere no /#"ce o$ /",ment is
s/eci$ie+0 or "n, ot%er c%"n!e or "++ition &%ic% "#ters t%e e$$ect o$
t%e instrument in "n, res/ect0 is " m"teri"# "#ter"tion.
BILLS OF EF@HANGE
IF. FORM AND INTERPRETATION
Sec. 12;. !ill of e0change defined. 3 A i## o$ e1c%"n!e is "n
uncon+ition"# or+er in &ritin! "++resse+ , one /erson to "not%er0
si!ne+ , t%e /erson !i4in! it0 re'uirin! t%e /erson to &%om it is
"++resse+ to /", on +em"n+ or "t " $i1e+ or +etermin"#e $uture
11 | P a g e
Act No. 2031 Ne"ot#ab$e I%&tru'e%t& La(
time " sum cert"in in mone, to or+er or to e"rer.

Sec. 12<. !ill not an assignment of funds in hands of drawee. 3 A i##
o$ itse#$ +oes not o/er"te "s "n "ssi!nment o$ t%e $un+s in t%e %"n+s
o$ t%e +r"&ee "4"i#"#e $or t%e /",ment t%ereo$0 "n+ t%e +r"&ee is
not #i"#e on t%e i## un#ess "n+ unti# %e "cce/ts t%e s"me.

Sec. 12=. !ill addressed to more than one drawee. - A i## m", e
"++resse+ to t&o or more +r"&ees :oint#,0 &%et%er t%e, "re /"rtners
or not. ut not to t&o or more +r"&ees in t%e "#tern"ti4e or in
succession.

Sec. 12>. #nland and foreign bills of e0change. - An in#"n+ i## o$
e1c%"n!e is " i## &%ic% is0 or on its $"ce /ur/orts to e0 ot% +r"&n
"n+ /","#e &it%in t%e P%i#i//ines. An, ot%er i## is " $orei!n i##.
Un#ess t%e contr"r, "//e"rs on t%e $"ce o$ t%e i##0 t%e %o#+er m",
tre"t it "s "n in#"n+ i##.

Sec. 16?. When bill may be treated as promissory note. 3 W%ere in "
i## t%e +r"&er "n+ +r"&ee "re t%e s"me /erson or &%ere t%e
+r"&ee is " $ictitious /erson or " /erson not %"4in! c"/"cit, to
contr"ct0 t%e %o#+er m", tre"t t%e instrument "t %is o/tion eit%er "s "
i## o$ e1c%"n!e or "s " /romissor, note.

Sec. 161. -eferee in case of need. - T%e +r"&er o$ " i## "n+ "n,
in+orser m", insert t%ereon t%e n"me o$ " /erson to &%om t%e
%o#+er m", resort in c"se o$ nee+. t%"t is to s",0 in c"se t%e i## is
+is%onore+ , non3"cce/t"nce or non3/",ment. Suc% /erson is
c"##e+ " re$eree in c"se o$ nee+. It is in t%e o/tion o$ t%e %o#+er to
resort to t%e re$eree in c"se o$ nee+ or not "s %e m", see $it.

F. A@@EPTAN@E
Sec. 162. Acceptance; how made by and so forth. 3 T%e "cce/t"nce
o$ " i## is t%e si!ni$ic"tion , t%e +r"&ee o$ %is "ssent to t%e or+er o$
t%e +r"&er. T%e "cce/t"nce must e in &ritin! "n+ si!ne+ , t%e
+r"&ee. It must not e1/ress t%"t t%e +r"&ee &i## /er$orm %is /romise
, "n, ot%er me"ns t%"n t%e /",ment o$ mone,.

Sec. 166. 2older entitled to acceptance on face of bill. 3 T%e %o#+er
o$ " i## /resentin! t%e s"me $or "cce/t"nce m", re'uire t%"t t%e
"cce/t"nce e &ritten on t%e i##0 "n+0 i$ suc% re'uest is re$use+0
m", tre"t t%e i## "s +is%onore+.

Sec. 167. Acceptance by separate instrument. - W%ere "n
"cce/t"nce is &ritten on " /"/er ot%er t%"n t%e i## itse#$0 it +oes not
in+ t%e "cce/tor e1ce/t in $"4or o$ " /erson to &%om it is s%o&n
"n+ &%o0 on t%e $"it% t%ereo$0 recei4es t%e i## $or 4"#ue.

Sec. 168. )romise to accept; when e1uivalent to acceptance. 3 An
uncon+ition"# /romise in &ritin! to "cce/t " i## e$ore it is +r"&n is
+eeme+ "n "ctu"# "cce/t"nce in $"4or o$ e4er, /erson &%o0 u/on
t%e $"it% t%ereo$0 recei4es t%e i## $or 4"#ue.

Sec. 16;. Time allowed drawee to accept. 3 T%e +r"&ee is "##o&e+
t&ent,3$our %ours "$ter /resentment in &%ic% to +eci+e &%et%er or
not %e &i## "cce/t t%e i##. t%e "cce/t"nce0 i$ !i4en0 +"tes "s o$ t%e
+", o$ /resent"tion.

Sec. 16<. &iability of drawee returning or destroying bill. 3 W%ere "
+r"&ee to &%om " i## is +e#i4ere+ $or "cce/t"nce +estro,s t%e
s"me0 or re$uses &it%in t&ent,3$our %ours "$ter suc% +e#i4er, or
&it%in suc% ot%er /erio+ "s t%e %o#+er m", "##o&0 to return t%e i##
"cce/te+ or non3"cce/te+ to t%e %o#+er0 %e &i## e +eeme+ to %"4e
"cce/te+ t%e s"me.

Sec. 16=. Acceptance of incomplete bill. 3 A i## m", e "cce/te+
e$ore it %"s een si!ne+ , t%e +r"&er0 or &%i#e ot%er&ise
incom/#ete0 or &%en it is o4er+ue0 or "$ter it %"s een +is%onore+ ,
" /re4ious re$us"# to "cce/t0 or , non /",ment. But &%en " i##
/","#e "$ter si!%t is +is%onore+ , non3"cce/t"nce "n+ t%e +r"&ee
suse'uent#, "cce/ts it0 t%e %o#+er0 in t%e "sence o$ "n, +i$$erent
"!reement0 is entit#e+ to %"4e t%e i## "cce/te+ "s o$ t%e +"te o$ t%e
$irst /resentment.

Sec. 16>. +inds of acceptance. - An "cce/t"nce is eit%er !ener"# or
'u"#i$ie+. A !ener"# "cce/t"nce "ssents &it%out 'u"#i$ic"tion to t%e
or+er o$ t%e +r"&er. A 'u"#i$ie+ "cce/t"nce in e1/ress terms 4"ries
t%e e$$ect o$ t%e i## "s +r"&n.

Sec. 17?. What constitutes a general acceptance. 3 An "cce/t"nce
to /", "t " /"rticu#"r /#"ce is " !ener"# "cce/t"nce un#ess it
e1/ress#, st"tes t%"t t%e i## is to e /"i+ t%ere on#, "n+ not
e#se&%ere.

Sec. 171. ,ualified acceptance. 3 An "cce/t"nce is 'u"#i$ie+ &%ic%
is(
)"* @on+ition"#. t%"t is to s",0 &%ic% m"-es /",ment , t%e "cce/tor
+e/en+ent on t%e $u#$i##ment o$ " con+ition t%erein st"te+.

)* P"rti"#. t%"t is to s",0 "n "cce/t"nce to /", /"rt on#, o$ t%e
"mount $or &%ic% t%e i## is +r"&n.

)c* Loc"#. t%"t is to s",0 "n "cce/t"nce to /", on#, "t " /"rticu#"r
12 | P a g e
Act No. 2031 Ne"ot#ab$e I%&tru'e%t& La(
/#"ce.

)+* Gu"#i$ie+ "s to time.

)e* T%e "cce/t"nce o$ some0 one or more o$ t%e +r"&ees ut not o$
"##.
Sec. 172. -ights of parties as to 1ualified acceptance. 3 T%e %o#+er
m", re$use to t"-e " 'u"#i$ie+ "cce/t"nce "n+ i$ %e +oes not ot"in
"n un'u"#i$ie+ "cce/t"nce0 %e m", tre"t t%e i## "s +is%onore+ ,
non3"cce/t"nce. W%ere " 'u"#i$ie+ "cce/t"nce is t"-en0 t%e +r"&er
"n+ in+orsers "re +isc%"r!e+ $rom #i"i#it, on t%e i## un#ess t%e,
%"4e e1/ress#, or im/#ie+#, "ut%ori9e+ t%e %o#+er to t"-e " 'u"#i$ie+
"cce/t"nce0 or suse'uent#, "ssent t%ereto. W%en t%e +r"&er or "n
in+orser recei4es notice o$ " 'u"#i$ie+ "cce/t"nce0 %e must0 &it%in "
re"son"#e time0 e1/ress %is +issent to t%e %o#+er or %e &i## e
+eeme+ to %"4e "ssente+ t%ereto.

FI. PRESENTMENT FOR A@@EPTAN@E
Sec. 176. When presentment for acceptance must be made. 3
Presentment $or "cce/t"nce must e m"+e(
)"* W%ere t%e i## is /","#e "$ter si!%t0 or in "n, ot%er c"se0 &%ere
/resentment $or "cce/t"nce is necess"r, in or+er to $i1 t%e m"turit,
o$ t%e instrument. or

)* W%ere t%e i## e1/ress#, sti/u#"tes t%"t it s%"## e /resente+ $or
"cce/t"nce. or

)c* W%ere t%e i## is +r"&n /","#e e#se&%ere t%"n "t t%e resi+ence
or /#"ce o$ usiness o$ t%e +r"&ee.
In no ot%er c"se is /resentment $or "cce/t"nce necess"r, in or+er
to ren+er "n, /"rt, to t%e i## #i"#e.

Sec. 177. When failure to present releases drawer and indorser. 3
E1ce/t "s %erein ot%er&ise /ro4i+e+0 t%e %o#+er o$ " i## &%ic% is
re'uire+ , t%e ne1t /rece+in! section to e /resente+ $or
"cce/t"nce must eit%er /resent it $or "cce/t"nce or ne!oti"te it
&it%in " re"son"#e time. I$ %e $"i#s to +o so0 t%e +r"&er "n+ "##
in+orsers "re +isc%"r!e+.

Sec. 178. )resentment; how made. 3 Presentment $or "cce/t"nce
must e m"+e , or on e%"#$ o$ t%e %o#+er "t " re"son"#e %our0 on
" usiness +", "n+ e$ore t%e i## is o4er+ue0 to t%e +r"&ee or some
/erson "ut%ori9e+ to "cce/t or re$use "cce/t"nce on %is e%"#$. "n+
)"* W%ere " i## is "++resse+ to t&o or more +r"&ees &%o "re not
/"rtners0 /resentment must e m"+e to t%em "## un#ess one %"s
"ut%orit, to "cce/t or re$use "cce/t"nce $or "##0 in &%ic% c"se
/resentment m", e m"+e to %im on#,.

)* W%ere t%e +r"&ee is +e"+0 /resentment m", e m"+e to %is
/erson"# re/resent"ti4e.

)c* W%ere t%e +r"&ee %"s een "+:u+!e+ " "n-ru/t or "n inso#4ent
or %"s m"+e "n "ssi!nment $or t%e ene$it o$ cre+itors0 /resentment
m", e m"+e to %im or to %is trustee or "ssi!nee.
Sec. 17;. On what days presentment may be made. 3 A i## m", e
/resente+ $or "cce/t"nce on "n, +", on &%ic% ne!oti"#e
instruments m", e /resente+ $or /",ment un+er t%e /ro4isions o$
Sections se4ent,3t&o "n+ ei!%t,3$i4e o$ t%is Act. W%en S"tur+", is
not ot%er&ise " %o#i+",0 /resentment $or "cce/t"nce m", e m"+e
e$ore t&e#4e o5c#oc- noon on t%"t +",.

Sec. 17<. )resentment where time is insufficient. 3 W%ere t%e %o#+er
o$ " i## +r"&n /","#e e#se&%ere t%"n "t t%e /#"ce o$ usiness or
t%e resi+ence o$ t%e +r"&ee %"s no time0 &it% t%e e1ercise o$
re"son"#e +i#i!ence0 to /resent t%e i## $or "cce/t"nce e$ore
/resentin! it $or /",ment on t%e +", t%"t it $"##s +ue0 t%e +e#",
c"use+ , /resentin! t%e i## $or "cce/t"nce e$ore /resentin! it $or
/",ment is e1cuse+ "n+ +oes not +isc%"r!e t%e +r"&ers "n+
in+orsers.

Sec. 17=. Where presentment is e0cused. - Presentment $or
"cce/t"nce is e1cuse+ "n+ " i## m", e tre"te+ "s +is%onore+ ,
non3"cce/t"nce in eit%er o$ t%e $o##o&in! c"ses(
)"* W%ere t%e +r"&ee is +e"+0 or %"s "scon+e+0 or is " $ictitious
/erson or " /erson not %"4in! c"/"cit, to contr"ct , i##.

)* W%ere0 "$ter t%e e1ercise o$ re"son"#e +i#i!ence0 /resentment
c"n not e m"+e.

)c* W%ere0 "#t%ou!% /resentment %"s een irre!u#"r0 "cce/t"nce
%"s een re$use+ on some ot%er !roun+.
Sec. 17>. When dishonored by nonacceptance. 3 A i## is +is%onore+
, non3"cce/t"nce(
)"* W%en it is +u#, /resente+ $or "cce/t"nce "n+ suc% "n
"cce/t"nce "s is /rescrie+ , t%is Act is re$use+ or c"n not e
ot"ine+. or

)* W%en /resentment $or "cce/t"nce is e1cuse+ "n+ t%e i## is not
"cce/te+.
13 | P a g e
Act No. 2031 Ne"ot#ab$e I%&tru'e%t& La(
Sec. 18?. Duty of holder where bill not accepted. - W%ere " i## is
+u#, /resente+ $or "cce/t"nce "n+ is not "cce/te+ &it%in t%e
/rescrie+ time0 t%e /erson /resentin! it must tre"t t%e i## "s
+is%onore+ , non"cce/t"nce or %e #oses t%e ri!%t o$ recourse
"!"inst t%e +r"&er "n+ in+orsers.

Sec. 181. -ights of holder where bill not accepted. 3 W%en " i## is
+is%onore+ , non"cce/t"nce0 "n imme+i"te ri!%t o$ recourse
"!"inst t%e +r"&er "n+ in+orsers "ccrues to t%e %o#+er "n+ no
/resentment $or /",ment is necess"r,.

FII. PROTEST
Sec. 182. #n what cases protest necessary. 3 W%ere " $orei!n i##
"//e"rin! on its $"ce to e suc% is +is%onore+ , non"cce/t"nce0 it
must e +u#, /roteste+ $or non"cce/t"nce0 , non"cce/t"nce is
+is%onore+ "n+ &%ere suc% " i## &%ic% %"s not /re4ious#, een
+is%onore+ , non/",ment0 it must e +u#, /roteste+ $or
non/",ment. I$ it is not so /roteste+0 t%e +r"&er "n+ in+orsers "re
+isc%"r!e+. W%ere " i## +oes not "//e"r on its $"ce to e " $orei!n
i##0 /rotest t%ereo$ in c"se o$ +is%onor is unnecess"r,.

Sec. 186. )rotest; how made. - T%e /rotest must e "nne1e+ to t%e
i## or must cont"in " co/, t%ereo$0 "n+ must e un+er t%e %"n+ "n+
se"# o$ t%e not"r, m"-in! it "n+ must s/eci$,(
)"* T%e time "n+ /#"ce o$ /resentment.

)* T%e $"ct t%"t /resentment &"s m"+e "n+ t%e m"nner t%ereo$.

)c* T%e c"use or re"son $or /rotestin! t%e i##.

)+* T%e +em"n+ m"+e "n+ t%e "ns&er !i4en0 i$ "n,0 or t%e $"ct t%"t
t%e +r"&ee or "cce/tor cou#+ not e $oun+.
Sec. 187. )rotest by whom made. 3 Protest m", e m"+e ,(
)"* A not"r, /u#ic. or

)* B, "n, res/ect"#e resi+ent o$ t%e /#"ce &%ere t%e i## is
+is%onore+0 in t%e /resence o$ t&o or more cre+i#e &itnesses.
Sec. 188. )rotest; when to be made. 3 W%en " i## is /roteste+0 suc%
/rotest must e m"+e on t%e +", o$ its +is%onor un#ess +e#", is
e1cuse+ "s %erein /ro4i+e+. W%en " i## %"s een +u#, note+0 t%e
/rotest m", e suse'uent#, e1ten+e+ "s o$ t%e +"te o$ t%e notin!.

Sec. 18;. )rotest; where made. - A i## must e /roteste+ "t t%e
/#"ce &%ere it is +is%onore+0 e1ce/t t%"t &%en " i## +r"&n /","#e
"t t%e /#"ce o$ usiness or resi+ence o$ some /erson ot%er t%"n t%e
+r"&ee %"s een +is%onore+ , non"cce/t"nce0 it must e
/roteste+ $or non3/",ment "t t%e /#"ce &%ere it is e1/resse+ to e
/","#e0 "n+ no $urt%er /resentment $or /",ment to0 or +em"n+ on0
t%e +r"&ee is necess"r,.

Sec. 18<. )rotest both for non-acceptance and non-payment. - A i##
&%ic% %"s een /roteste+ $or non3"cce/t"nce m", e suse'uent#,
/roteste+ $or non3/",ment.

Sec. 18=. )rotest before maturity where acceptor insolvent. 3 W%ere
t%e "cce/tor %"s een "+:u+!e+ " "n-ru/t or "n inso#4ent or %"s
m"+e "n "ssi!nment $or t%e ene$it o$ cre+itors e$ore t%e i##
m"tures0 t%e %o#+er m", c"use t%e i## to e /roteste+ $or etter
securit, "!"inst t%e +r"&er "n+ in+orsers. ro#es 4irtu"# #"& #ir"r,

Sec. 18>. When protest dispensed with. 3 Protest is +is/ense+ &it%
, "n, circumst"nces &%ic% &ou#+ +is/ense &it% notice o$ +is%onor.
De#", in notin! or /rotestin! is e1cuse+ &%en +e#", is c"use+ ,
circumst"nces e,on+ t%e contro# o$ t%e %o#+er "n+ not im/ut"#e to
%is +e$"u#t0 miscon+uct0 or ne!#i!ence. W%en t%e c"use o$ +e#",
ce"ses to o/er"te0 t%e i## must e note+ or /roteste+ &it%
re"son"#e +i#i!ence.

Sec. 1;?. )rotest where bill is lost and so forth. 3 W%en " i## is #ost
or +estro,e+ or is &ron!#, +et"ine+ $rom t%e /erson entit#e+ to %o#+
it0 /rotest m", e m"+e on " co/, or &ritten /"rticu#"rs t%ereo$.

FIII. A@@EPTAN@E FOR HONOR
Sec. 1;1. When bill may be accepted for honor. 3 W%en " i## o$
e1c%"n!e %"s een /roteste+ $or +is%onor , non3"cce/t"nce or
/roteste+ $or etter securit, "n+ is not o4er+ue0 "n, /erson not
ein! " /"rt, "#re"+, #i"#e t%ereon m",0 &it% t%e consent o$ t%e
%o#+er0 inter4ene "n+ "cce/t t%e i## supra /rotest $or t%e %onor o$
"n, /"rt, #i"#e t%ereon or $or t%e %onor o$ t%e /erson $or &%ose
"ccount t%e i## is +r"&n. T%e "cce/t"nce $or %onor m", e $or /"rt
on#, o$ t%e sum $or &%ic% t%e i## is +r"&n. "n+ &%ere t%ere %"s een
"n "cce/t"nce $or %onor $or one /"rt,0 t%ere m", e " $urt%er
"cce/t"nce , " +i$$erent /erson $or t%e %onor o$ "not%er /"rt,.

Sec. 1;2. Acceptance for honor; how made. 3 An "cce/t"nce $or
%onor su/r" /rotest must e in &ritin! "n+ in+ic"te t%"t it is "n
"cce/t"nce $or %onor "n+ must e si!ne+ , t%e "cce/tor $or %onor.

Sec. 1;6. When deemed to be an acceptance for honor of the
drawer. 3 W%ere "n "cce/t"nce $or %onor +oes not e1/ress#, st"te
14 | P a g e
Act No. 2031 Ne"ot#ab$e I%&tru'e%t& La(
$or &%ose %onor it is m"+e0 it is +eeme+ to e "n "cce/t"nce $or t%e
%onor o$ t%e +r"&er.

Sec. 1;7. &iability of the acceptor for honor. - T%e "cce/tor $or %onor
is #i"#e to t%e %o#+er "n+ to "## /"rties to t%e i## suse'uent to t%e
/"rt, $or &%ose %onor %e %"s "cce/te+.

Sec. 1;8. Agreement of acceptor for honor. 3 T%e "cce/tor $or %onor0
, suc% "cce/t"nce0 en!"!es t%"t %e &i##0 on +ue /resentment0 /",
t%e i## "ccor+in! to t%e terms o$ %is "cce/t"nce /ro4i+e+ it s%"## not
%"4e een /"i+ , t%e +r"&ee "n+ /ro4i+e+ "#so t%"t is s%"## %"4e
een +u#, /resente+ $or /",ment "n+ /roteste+ $or non3/",ment
"n+ notice o$ +is%onor !i4en to %im.

Sec. 1;;. 3aturity of bill payable after sight; accepted for honor. 3
W%ere " i## /","#e "$ter si!%t is "cce/te+ $or %onor0 its m"turit, is
c"#cu#"te+ $rom t%e +"te o$ t%e notin! $or non3"cce/t"nce "n+ not
$rom t%e +"te o$ t%e "cce/t"nce $or %onor.

Sec. 1;<. )rotest of bill accepted for honor and so forth. 3 W%ere "
+is%onore+ i## %"s een "cce/te+ $or %onor su/r" /rotest or
cont"ins " re$eree in c"se o$ nee+0 it must e /roteste+ $or non3
/",ment e$ore it is /resente+ $or /",ment to t%e "cce/tor $or %onor
or re$eree in c"se o$ nee+.

Sec. 1;=. )resentment for payment to acceptor for honor how
made. 3 Presentment $or /",ment to t%e "cce/tor $or %onor must e
m"+e "s $o##o&s(
)"* I$ it is to e /resente+ in t%e /#"ce &%ere t%e /rotest $or non3
/",ment &"s m"+e0 it must e /resente+ not #"ter t%"n t%e +",
$o##o&in! its m"turit,.

)* I$ it is to e /resente+ in some ot%er /#"ce t%"n t%e /#"ce &%ere it
&"s /roteste+0 t%en it must e $or&"r+e+ &it%in t%e time s/eci$ie+ in
Section one %un+re+ "n+ $our.
Sec. 1;>. When delay in ma"ing presentment is e0cused. 3 T%e
/ro4isions o$ Section ei!%t,3one "//#, &%ere t%ere is +e#", in
m"-in! /resentment to t%e "cce/tor $or %onor or re$eree in c"se o$
nee+.

Sec. 1<?. Dishonor of bill by acceptor for honor. 3 W%en t%e i## is
+is%onore+ , t%e "cce/tor $or %onor0 it must e /roteste+ $or non3
/",ment , %im.

FIB. PAEMENT FOR HONOR
Sec. 1<1. Who may ma"e payment for honor. 3 W%ere " i## %"s
een /roteste+ $or non3/",ment0 "n, /erson m", inter4ene "n+ /",
it supra /rotest $or t%e %onor o$ "n, /erson #i"#e t%ereon or $or t%e
%onor o$ t%e /erson $or &%ose "ccount it &"s +r"&n.

Sec. 1<2. )ayment for honor; how made. 3 T%e /",ment $or %onor
supra /rotest0 in or+er to o/er"te "s suc% "n+ not "s " mere
4o#unt"r, /",ment0 must e "tteste+ , " not"ri"# "ct o$ %onor &%ic%
m", e "//en+e+ to t%e /rotest or $orm "n e1tension to it.

Sec. 1<6. Declaration before payment for honor. - T%e not"ri"# "ct o$
%onor must e $oun+e+ on " +ec#"r"tion m"+e , t%e /",er $or
%onor or , %is "!ent in t%"t e%"#$ +ec#"rin! %is intention to /", t%e
i## $or %onor "n+ $or &%ose %onor %e /",s.

Sec. 1<7. )reference of parties offering to pay for honor. 3 W%ere
t&o or more /ersons o$$er to /", " i## $or t%e %onor o$ +i$$erent
/"rties0 t%e /erson &%ose /",ment &i## +isc%"r!e most /"rties to t%e
i## is to e !i4en t%e /re$erence.

Sec. 1<8. (ffect on subse1uent parties where bill is paid for honor. 3
W%ere " i## %"s een /"i+ $or %onor0 "## /"rties suse'uent to t%e
/"rt, $or &%ose %onor it is /"i+ "re +isc%"r!e+ ut t%e /",er $or
%onor is suro!"te+ $or0 "n+ succee+s to0 ot% t%e ri!%ts "n+ +uties
o$ t%e %o#+er "s re!"r+s t%e /"rt, $or &%ose %onor %e /",s "n+ "##
/"rties #i"#e to t%e #"tter.

Sec. 1<;. Where holder refuses to receive payment supra protest. -
W%ere t%e %o#+er o$ " i## re$uses to recei4e /",ment supra /rotest0
%e #oses %is ri!%t o$ recourse "!"inst "n, /"rt, &%o &ou#+ %"4e
een +isc%"r!e+ , suc% /",ment.

Sec. 1<<. -ights of payer for honor. 3 T%e /",er $or %onor0 on /",in!
to t%e %o#+er t%e "mount o$ t%e i## "n+ t%e not"ri"# e1/enses
inci+ent"# to its +is%onor0 is entit#e+ to recei4e ot% t%e i## itse#$ "n+
t%e /rotest.

FB. BILLS IN SET
Sec. 1<=. !ills in set constitute one bill. 3 W%ere " i## is +r"&n in "
set0 e"c% /"rt o$ t%e set ein! numere+ "n+ cont"inin! " re$erence
to t%e ot%er /"rts0 t%e &%o#e o$ t%e /"rts constitutes one i##.

Sec. 1<>. -ight of holders where different parts are negotiated. 3
W%ere t&o or more /"rts o$ " set "re ne!oti"te+ to +i$$erent %o#+ers
in +ue course0 t%e %o#+er &%ose tit#e $irst "ccrues is0 "s et&een
suc% %o#+ers0 t%e true o&ner o$ t%e i##. But not%in! in t%is section
"$$ects t%e ri!%t o$ " /erson &%o0 in +ue course0 "cce/ts or /",s t%e
/"rts $irst /resente+ to %im.
15 | P a g e
Act No. 2031 Ne"ot#ab$e I%&tru'e%t& La(

Sec. 1=?. &iability of holder who indorses two or more parts of a set
to different persons. 3 W%ere t%e %o#+er o$ " set in+orses t&o or
more /"rts to +i$$erent /ersons %e is #i"#e on e4er, suc% /"rt0 "n+
e4er, in+orser suse'uent to %im is #i"#e on t%e /"rt %e %"s %imse#$
in+orse+0 "s i$ suc% /"rts &ere se/"r"te i##s.

Sec. 1=1. Acceptance of bill drawn in sets. 3 T%e "cce/t"nce m", e
&ritten on "n, /"rt "n+ it must e &ritten on one /"rt on#,. I$ t%e
+r"&ee "cce/ts more t%"n one /"rt "n+ suc% "cce/te+ /"rts
ne!oti"te+ to +i$$erent %o#+ers in +ue course0 %e is #i"#e on e4er,
suc% /"rt "s i$ it &ere " se/"r"te i##.

Sec. 1=2. )ayment by acceptor of bills drawn in sets. 3 W%en t%e
"cce/tor o$ " i## +r"&n in " set /",s it &it%out re'uirin! t%e /"rt
e"rin! %is "cce/t"nce to e +e#i4ere+ u/ to %im0 "n+ t%e /"rt "t
m"turit, is outst"n+in! in t%e %"n+s o$ " %o#+er in +ue course0 %e is
#i"#e to t%e %o#+er t%ereon.

Sec. 1=6. (ffect of discharging one of a set. 3 E1ce/t "s %erein
ot%er&ise /ro4i+e+0 &%ere "n, one /"rt o$ " i## +r"&n in " set is
+isc%"r!e+ , /",ment or ot%er&ise0 t%e &%o#e i## is +isc%"r!e+.

FBI. PROMISSORE NOTES AND @HE@HS
Sec. 1=7. )romissory note defined. 3 A ne!oti"#e /romissor, note
&it%in t%e me"nin! o$ t%is Act is "n uncon+ition"# /romise in &ritin!
m"+e , one /erson to "not%er0 si!ne+ , t%e m"-er0 en!"!in! to
/", on +em"n+0 or "t " $i1e+ or +etermin"#e $uture time0 " sum
cert"in in mone, to or+er or to e"rer. W%ere " note is +r"&n to t%e
m"-er5s o&n or+er0 it is not com/#ete unti# in+orse+ , %im.

Sec. 1=8. $hec" defined. 3 A c%ec- is " i## o$ e1c%"n!e +r"&n on "
"n- /","#e on +em"n+. E1ce/t "s %erein ot%er&ise /ro4i+e+0 t%e
/ro4isions o$ t%is Act "//#ic"#e to " i## o$ e1c%"n!e /","#e on
+em"n+ "//#, to " c%ec-.

Sec. 1=;. Within what time a chec" must be presented. - A c%ec-
must e /resente+ $or /",ment &it%in " re"son"#e time "$ter its
issue or t%e +r"&er &i## e +isc%"r!e+ $rom #i"i#it, t%ereon to t%e
e1tent o$ t%e #oss c"use+ , t%e +e#",.

Sec. 1=<. $ertification of chec"; effect of. 3 W%ere " c%ec- is
certi$ie+ , t%e "n- on &%ic% it is +r"&n0 t%e certi$ic"tion is
e'ui4"#ent to "n "cce/t"nce.

Sec. 1==. (ffect where the holder of chec" procures it to be certified.
- W%ere t%e %o#+er o$ " c%ec- /rocures it to e "cce/te+ or certi$ie+0
t%e +r"&er "n+ "## in+orsers "re +isc%"r!e+ $rom #i"i#it, t%ereon.

Sec. 1=>. When chec" operates as an assignment. 3 A c%ec- o$ itse#$
+oes not o/er"te "s "n "ssi!nment o$ "n, /"rt o$ t%e $un+s to t%e
cre+it o$ t%e +r"&er &it% t%e "n-0 "n+ t%e "n- is not #i"#e to t%e
%o#+er un#ess "n+ unti# it "cce/ts or certi$ies t%e c%ec-.

FBII. GENERAL PROBISIONS
Sec. 1>?. 'hort title. 3 T%is Act s%"## e -no&n "s t%e Ne!oti"#e
Instruments L"&.

Sec. 1>1. Definition and meaning of terms. 3 In t%is Act0 un#ess t%e
contr"ct ot%er&ise re'uires(
%Acceptance% me"ns "n "cce/t"nce com/#ete+ , +e#i4er, or
noti$ic"tion.

%Action% inc#u+es counterc#"im "n+ set3o$$.

%!an"% inc#u+es "n, /erson or "ssoci"tion o$ /ersons c"rr,in! on
t%e usiness o$ "n-in!0 &%et%er incor/or"te+ or not.

%!earer% me"ns t%e /erson in /ossession o$ " i## or note &%ic% is
/","#e to e"rer.

%!ill% me"ns i## o$ e1c%"n!e0 "n+ CnoteC me"ns ne!oti"#e
/romissor, note.

%Delivery% me"ns tr"ns$er o$ /ossession0 "ctu"# or constructi4e0 $rom
one /erson to "not%er.

%2older% me"ns t%e /",ee or in+orsee o$ " i## or note &%o is in
/ossession o$ it0 or t%e e"rer t%ereo$.

%#ndorsement% me"ns "n in+orsement com/#ete+ , +e#i4er,.

%#nstrument% me"ns ne!oti"#e instrument.

%#ssue% me"ns t%e $irst +e#i4er, o$ t%e instrument0 com/#ete in $orm0
to " /erson &%o t"-es it "s " %o#+er.

%)erson% inc#u+es " o+, o$ /ersons0 &%et%er incor/or"te+ or not.

%*alue% me"ns 4"#u"#e consi+er"tion.

%Written% inc#u+es /rinte+0 "n+ %writing% inc#u+es /rint.
16 | P a g e
Act No. 2031 Ne"ot#ab$e I%&tru'e%t& La(
Sec. 1>2. )ersons primarily liable on instrument. 3 T%e /erson
%primarily% #i"#e on "n instrument is t%e /erson &%o0 , t%e terms o$
t%e instrument0 is "so#ute#, re'uire+ to /", t%e s"me. A## ot%er
/"rties "re %secondarily% #i"#e.

Sec. 1>6. -easonable time what constitutes. 3 In +eterminin! &%"t
is " %reasonable time% re!"r+ is to e %"+ to t%e n"ture o$ t%e
instrument0 t%e us"!e o$ tr"+e or usiness &it% res/ect to suc%
instruments0 "n+ t%e $"cts o$ t%e /"rticu#"r c"se.

Sec. 1>7. Time how computed; when last day falls on holiday. 3
W%ere t%e +",0 or t%e #"st +", $or +oin! "n, "ct %erein re'uire+ or
/ermitte+ to e +one $"##s on " Sun+", or on " %o#i+",0 t%e "ct m",
e +one on t%e ne1t succee+in! secu#"r or usiness +",.

Sec. 1>8. Application of Act. 3 T%e /ro4isions o$ t%is Act +o not "//#,
to ne!oti"#e instruments m"+e "n+ +e#i4ere+ /rior to t%e t"-in!
e$$ect %ereo$.

Sec. 1>;. $ases not provided for in Act. - An, c"se not /ro4i+e+ $or
in t%is Act s%"## e !o4erne+ , t%e /ro4isions o$ e1istin! #e!is#"tion
or in +e$"u#t t%ereo$0 , t%e ru#es o$ t%e #"& merc%"nt.
Sec. 1><. -epeals. 3 A## "cts "n+ #"&s "n+ /"rts t%ereo$ inconsistent
&it% t%is Act "re %ere, re/e"#e+.

Sec. 1>=. Time when Act ta"es effect. 3 T%is Act s%"## t"-e e$$ect
ninet, +",s "$ter its /u#ic"tion in t%e O$$ici"# G"9ette o$ t%e
P%i#i//ine Is#"n+s s%"## %"4e een com/#ete+.

(nacted( Feru"r, 60 1>11
17 | P a g e
Act No. 2031 Ne"ot#ab$e I%&tru'e%t& La(