SECTION 1.

An instrument to be negotiable must conform to the following requirements:

(a)It must be in writing and signed by the maker or drawer;
(b)Must contain an unconditional promise or order to pay a sum certain in money;
(c)Must be payable on demand, or at a fixed or determinable future time;
(d)Must be payable to order or to bearer; and
(e)Where the instrument is addressed to a drawee, he must be named
or otherwise indicated therein with reasonable certainty.

SECTION 52A holder in due course is a holder who has

taken the instrument under the following conditions:
(a)That it is complete and regular upon its face;
(b)That he became the holder of it before it was overdue, and
without notice that it had been previously dishonored, if such was the fact;
(c)That he took it in good faith and for value;
(d)That at the time it was negotiated to him he had no notice of any infirmity
in the instrument or defect in the title of the person negotiating it.

Accommodation party VS regular party

1. AP signs an instrument w/o receiving value
2. AP signs for purpose of lending his name
3. AP may always show by parol evidence that he is only such
4. AP cannot avail of the defense of absence or failure of
Consideration against a HNIDC while a regular party
May avail of said defense against a HNIDC
5. AP after paying holder, may sue for reimbursement the AP, although
A subsequent party. While a regular party may not sue any subsequent
Parties for reimbursement

Negotiation vs Assignment
1. N refers only to nego instrument, A refers to gen an ordinary contract
2. N, the transferee is a holder, A is assignee
3. a HIDC is subject to real defenses, Ass is subject to both real and personal
4. a HIDC may acquire a better title or greater rights while
An assignee merely steps into the shoes of assignor
5. general indorser warrants the solvency of prior parties, Ass do not
6. Indorser not liable undless theres presentment and notice of dishonor
While Ass is liable even without notice of dishonor
7. Nego is governed by NIL while Ass is Art 1624-1635 of NCC

SECTION 65.Warranty Where Negotiation by Delivery and So Forth. —

Every person negotiating an instrument by delivery or by a qualified indorsement warrants —
(a)That the instrument is genuine and in all respects what it purports to be;
(b)That he has a good title to it;
(c)That all prior parties had capacity to contract;
(d)That he has no knowledge of any fact which would impair the validity
of the instrument or render it valueless.
But when the negotiation is by delivery only, the warranty extends in favor
of no holder other than the immediate transferee.
The provisions of subdivision (c) of this section do not apply to persons
negotiating public or corporation securities, other than bills and notes.

SECTION 66.Liability of General Indorser. — Every indorser who indorses

without qualification, warrants, to all subsequent holders in due course —
(a)The matters and things mentioned in subdivisions (a), (b), and (c) of the next preceding section; and
(b)That the instrument is at the time of his indorsement valid and subsisting.
And, in addition, he engages that on due presentment, it shall be accepted or paid,
or both, as the case may be, according to its tenor, and that if it be dishonored,
and the necessary proceedings on dishonor be duly taken, he will pay the amount
thereof to the holder, or to any subsequent indorser who may be compelled to pay it.

SECTION 72.What Constitutes a Sufficient Presentment. —

Presentment for payment, to be sufficient, must be made —
(a)By the holder, or by some person authorized to receive payment on his behalf;
(b)At a reasonable hour on a business day;
(c)At a proper place as herein defined;
(d)To the person primarily liable on the instrument, or if he is absent
or inaccessible, to any person found at the place where the presentment is made.