TITLE II

BILLS OF
EXCHANGE
 Sec. Bill of Exchange defined.
126

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.
 Sec. Bill of Exchange defined.
126 Bill of exchange and promissory note
distinguished.
Bill Note
1. Contains unconditional Order Promise
2. Parties involve Drawer, Drawee, Payee Maker, Payee
3. Liability Drawer - secondarily Maker – primary
4. Completion Drawer’s own order – Maker’s own order – not
complete without indorsement complete until indorsed
5. Presentment Presented for acceptance No need to be presented
6. Payable on demand From its last negotiation From its issue
 Sec. Bill of Exchange defined.
126 When a promissory note like a bill of exchange.

MAKER PAYEE/INDORSER INDORSEE

 Sec. Bill of Exchange defined.
126 When a bill of exchange like a promissory note.

DRAWER DRAWEE PAYEE

 Sec. Bill of Exchange defined.
126 Other classes of bills of exchange.
1. Foreign Bill of Exchange

DRAWER DRAWEE PAYEE

 Sec. Bill of Exchange defined.
126 Other classes of bills of exchange.
2. Draft

DRAWER DRAWEE PAYEE

 Sec. Bill of Exchange defined.
126 Other classes of bills of exchange.
3. Trade Acceptance

DRAWER DRAWEE PAYEE

 Sec. Bill of Exchange defined.
126 Other classes of bills of exchange.
4. Letter of Credit

DRAWER DRAWEE PAYEE

 Sec.
Bill not an assignment of funds
127 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.
 Sec.
Bill addressed to more than one
128 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.
Sec.
Bill addressed to more than one
128 drawee.

DRAWEE 1 DRAWEE 2 DRAWER