Acceptance is the manifestation of the drawee to comply with the order or request of the

drawer as indicated or contained in the bill. Thus, if the drawer orders the drawee to pay A or
order the amount of 1,000, and the drawee accepts the bill when presented by the holder, then
he assents to the request made by the drawer, and that is to pay A or order 1,000. He is no
longer called the drawee rather he’s an acceptor now.

Why is it necessary that the drawee accepts the instrument?

The reason is that, he will not be liable nor bound in any way as a party to the bill. The
effect is that the holder has no recourse against him even if it appears that the drawer has
funds in his hands. The purpose really is to create liability on the part of the drawee but
remember the instances when presentment to the drawee is no longer necessary. I’ve
discussed it on chapter 6.
How do you make acceptance then?
Requisites for acceptance
1. It must be in writing, except constructive acceptance and to a foreign bill payable in another
state (unless the other state requires for written acceptance)
2. Must express a promise to pay money
3. Signed by the drawee
4. Delivered to the holder.
NOTE: Before delivery or notification, acceptor may revoke or cancel his acceptance.
The drawee who thereby becomes an acceptor assumes the liability of the maker (who has
primary liability) and the drawer, that of the first indorser.
Where do you put your acceptance then?
1. On the bill itself
Acceptance is usually made by writing across the face of the bill the word “accepted”
and signed by the drawee.
Take note however that the word “accepted” is not exclusive as to manifest the consent
of the drawee. Any word with the same implication may be taken into consideration to
determine his accpetance. Such as honoured checks, promis to pay, seen, presented, good or
just the signature itself. You just need to know the intention of the drawee to accept.
Let’s correlate this to Section 133. Holder being 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 itself, and, if such request is refused, he may treat the bill as dishonored.
Having said that, as a rule acceptance can be made thru the bill itself or on a separate
instrument but ONCE the holder requires the drawee to make the acceptance on the bill itself
and the latter refuses, then the bill may be treated as dishonored and the holder may go after
the persons secondarily liable, and those persons are the drawers and indorsers.
WHAT IS THE REASON THEN?
CHECK SECTION 134.
SEC. 134. Acceptance  by  separate instrument.— Where  an  acceptance is written on a paper
other than the bill itself, it does not 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.
2. On a separate bill
1. The acceptance is written be shown to the person to whom the instrument is negotiated; and
2. Such person must take the bill for value on the faith of such acceptance.
The holder must comply to the following conditions set forth in section 134 to bind the
acceptor and make him liable to the instrument. That would create a lot of inconvenience on
the part of the holder since he has to prove the said conditions, and that’s why the holder may
require the acceptor to put his acceptance on the bill itself to avoid this kind of situation.

Q: Ma’am is there any instance that acceptance can be made prior to the presentment? YES
students take a look at section 135.
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.
However you must comply with the following requisites:
1. unconditional promise
2. written

EXAMPLE:
A is engaged in selling cars. Now B comes to A to buy a car. B drafted a bill. But afraid that B
will not be able to pay and he doubted his financial ability, he wrote to X, drawee, asking if he
would accept the bill drafted by B. He replied and accepted it. X is liable to A at all costs.

“Pay to A or order P500 on April 1, 2021.”

(Sgd.) “B”
X
DRAWEE
 I WILL ACCEPT IT.

Here, if A further negotiates the bill to C then X would not be liable to C except when the
conditions set forth in section 134 has been complied with.
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.
As you can see acceptance has a significant impact on the part of the drawee because it would
create liability on his part. From being a drawee he becomes an acceptor. Being acceptor, he is
primarily liable to the instrument and naturally to the holder thereof. That’s why the law is
giving him enough time to think whether he would accept it or not and that time is 24 hours
from presentment.
Logically, upon presentment, the holder cannot force the drawee to give his acceptance right
after presentment since he had 24 hours neither may he treat the bill as dishonored. But take
note that it does not prohibit early acceptance just like section 135.
Take note: Banks does not have 24 hours to think whether or not to accept the CHECK since
the check is not being presented for acceptance but it is for PAYMENT.
Duty of the holder where bill is not accepted If within 24 hours after due presentment, the bill
is not accepted, the person presenting it must treat the bill as dishonored by non-acceptance
otherwise he will lose the right of recourse against the drawer and indorsers (NIL, Sec. 150).
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.
This section talks about constructive acceptance. Why? Because despite the absence of a
written acceptance the law treats the same as if it was accepted by the drawee.
1. destroys the instrument; (intention is necessary)
2. Refuses to return it within 24 hours after delivery or within such time given to him to return
the bill accepted or non-accepted. (Demand must be made)
Kinds of acceptance
1. General Acceptance -It assents without qualification to the order of the drawer. (NIL, Sec.
139)
2. Qualified Acceptance - An acceptance which in express terms varies the effect of the bill as
drawn.
NOTE: A holder may refuse to accept a qualified acceptance and if he does not obtain
an unqualified acceptance, he may treat the bill as dishonored by non-acceptance (NIL, Sec.
142).
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.
What are the situations here?
1. The right to an unqualified acceptance, correct? No conditions at all.
If accepted- good
If refused- the holder may treat it as dishonored bill by non-acceptance.
2. Qualified acceptance is taken by the holder. What would be the effect?
- The drawer and indorser would be discharged from liability on the instrument.
Is it absolute? NO. Because despite qualified acceptance the drawer and indorsers may
be held liable on the bill if:
a. He received a notice of such acceptance and he failed to dissent thereto.
b. They authorized the holder expressly or impliedly to take such acceptance.
In that sense, they are accountable to the instrument and to the holder.
What then constitutes a qualified acceptance?
Sec 141 QUALIFIED ACCEPTANCE
(a) Conditional; that is to say, which makes payment by the acceptor dependent on the
fulfillment of a condition therein stated;
i.e, I’ll accept it if you pass the board exam

(b) Partial; that is to say, an acceptance to pay part only of the amount for which the bill is
drawn;
i.,e I’ll accept it in so far as 2,000 only. Assuming the bill is 4,000.

(c) Local; that is to say, an acceptance to pay only at a particular place; (EXCLUSIONARY)
I’ll accept the bill at landbank Makati branch ONLY.

(d) Qualified as to time;

Let say it is payable within 10 days after sight and you accepted it with a qualification
that you’ll accept it on a different period like 30 days.

(e) The acceptance of some one or more of the drawees, but not of all.
A bill addressed to A,B, and C and acceptance were made by A and C only.
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 non-acceptance 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.

CHAPTER XI PRESENTMENT FOR ACCEPTANCE

It is the production or exhibition of a bill of exchange to the drawee for his acceptance
or payment. A presentment for acceptance includes presentment for payment.
Presentment for acceptance is necessary only in the cases expressly provided for in
Section 143 of the Negotiable Instruments Law (NIL). In no other case is presentment for
acceptance necessary in order to render any party to the bill liable. Obviously then, sight drafts
do not require presentment for acceptance.
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
I,e, payable 30 days after sight then 30 days would be counted from presentment.

(b)  Where the bill expressly stipulates that it shall be presented for acceptance; or
i.e, the bill must be presented for acceptance
(c) Where the bill is drawn payable elsewhere than at the residence or place of business of the
drawee
Specified place A bill payable to B at Landbank makati and drawee X lives in Taguig
while his business is at Manila.

Accordingly presentment for acceptance is not necessary if its payable on demand or at a fixed
date. Rather, they must be presented for payment only and not for acceptance. But it should be
considered that presentment for acceptance is for the benefit of the holder, because liability of
the drawee attaches only when accepts the bill otherwise the drawer is the person liable.

“Pay to A or order P500 on April 1, 2021.”

(Sgd.) “B”
X
DRAWEE

SEC 145
Presentment should be made by the holder or his authorized representative and the same
must be accepted by the drawee or to his authorized representative. It should be made within
a reasonable hour on a business day and before it is overdue.

Bill is addressed to 2 or more ALL OF THEM unless 1 has

drawees who are not authority to accept or refuse
partners
Drawee is DEAD Personal representative
Drawee is bankrupt or Him, trustee or assignee.
insolvent or made an
assignment to his creditors

Again, Failure to make such presentment will discharge the drawer from liability or to the
extent of the loss caused by the delay.
Instances when presentment is excused
1. Where the drawee is dead, or has absconded, or is a fictitious person not having capacity to
contract by bill
2. Where, after exercise of reasonable diligence, presentment cannot be made
3. Where, although presentment has been irregular, acceptance has been refused on some other
ground (NIL, Sec. 148).
Instances when a bill is dishonored by non-acceptance
1. When it is duly presented for acceptance and such an acceptance is refused or cannot be
obtained
2. When presentment for acceptance is excused, and the bill is not accepted (NIL, Sec. 149).
It is not sufficient that presentment for acceptance is excused, it is also necessary that
the bill remains not accepted.
Rules when a bill is dishonored by non-acceptance
1. Right of recourse against all secondary party accrues to the holder.
2. No presentment for payment is necessary since dishonor of the instrument by non-
payment is to be expected.
3. If the instrument is accepted after it has been dishonored by non-acceptance,
presentment for payment is necessary upon maturity.
4. In case of non-payment, holder must give the corresponding notice of dishonor;
otherwise, secondary parties are discharged.
In here, the holder may proceed to the drawer and indorsers without waiting for the
value of the bill without waiting for its maturity.

CHAPTER VII NOTICE OF DISHONOR

It is a notice given by the holder to the parties secondarily liable, drawer and each indorser, that the
instrument was dishonored by non-payment or non-acceptance by the drawee/maker.

NOTE: Immediate right of recourse against secondary parties will accrue only AFTER THE GIVING OF DUE
NOTICE OF DISHONOR.

Persons primarily liable need not be given notice of dishonor because they are the ones who dishonored
the instrument.

NOTE: After an instrument is dishonored by nonpayment, the persons secondarily liable become the
principal debtors.

Purposes for requiring notice of dishonor

1. To inform parties secondarily liable that the maker or acceptor has failed to meet his engagement; and

2. To advise them that they are required to make payment.

Time of giving the notice of dishonor

GR:As soon as instrument was dishonored (NIL, Sec. 102)

XPN: Delay is excused (NIL, Sec. 113)

NOTE: An instrument cannot be dishonored by nonpayment until after the maturity.

Take note that it is not mandatory that the holder should give each indorser a notice of
dishonor althought the effect is that the person who did not receive it will be discharged but
he is still liable for breach of his warranties.