BOBADILLA, ESTILO & YAP

CHAPTER XVII
GENERAL
PROVISIONS
Sec. 186. Within what
time a check must be
presented

M US T BE PR ES EN TE D F OR PAY M EN T W IT HI N A R EA S ON A BL E
TI ME AF TE R IT S IS SU E.
 Check is not presented within a
reasonable time after its issue;

Drawer suffers loss; and

Drawer may be Loss suffered by the drawer is

discharged from attributable to the delay.

liability if...
 Even if presented within a reasonable
time, the drawer will be discharged
altogether from liability thereon if he is
not given notice of dishonor within the
prescribed time.
 D RAW ER
Only to the extent of loss caused by the delay in
case of drawer.

II ND O RS ER
Wholly discharged in case of indorser.

Discharge in case
presentment delayed
 CERTIFICATION IS, IN EFFECT,
AN AGREEMENT BY THE BANK
AGAINST WHOM A CHECK IS
DRAWN THAT THE CHECK WILL
Sec. 187. BE PAID WHEN PRESENTED
FOR PAYMENT.
Certification of
check; effect of Word "certified" on the face of the check;
Name of the bank;
Date; and
Handwritten signature or initials of the officer
making the certification.
 Effects of Certification
BANK IS PRIMARILY DISCHARGES PERSONS
LIABLE ON THE CHECK SECONDARILY LIABLE F
PROCURED BY HOLDER
OPERATES AS AN
PAYEE/HOLDER BECOMES
ASSIGNMENT OF THE
THE DEPOSITOR OF THE
FUNDS OF THE DRAWER
DRAWEE BANK
IN THE HANDS OF THE
DRAWEE BANK
DRAWER MAY NOT ISSUE
A STOP PAYMENT ORDER
ON THE CERTIFIED CHECK
The object of certifying a
check is to enable the holder
to use it as money.

THUS, AVOIDS DEL AY AND RISKS OF

RE C EIVING, C OUNT ING, AND PASS ING FROM
HAND TO HAND LAR GE SUMS OF MONE Y.
Sec. 188. Effect where the
holder of a check procures it
to be accepted or certified
EF F ECT W H E RE E FF EC T W H ERE
H OL D ER C ERTI FIC AT IO N
P RO CU RE S O B TAI NE D B Y
CERT IFI CATIO N O T HE RS
O F CH E CK
the secondary parties
The drawer and the are not discharged
indorsers are because the holder has
discharged. not yet received
payment.
 UNDER BANKING LAWS
AND PRACTICE,
Sec. 189. When
check operates as By certification, the funds represented by
an assignment the check are transferred from the credit
of the drawer to that of the payee by
holder.
 Cases when bank may refuse
payment

T HE B ANK IS DR AWER 'S DEPOSIT DR AWER IS DRAWE R DIE S AND

INSOLVENT IS INSUFFIC IE NT INSOLVE NT AND PR OPE R NOTIC E IS
OR HE HAS NO PR OPE R NOTICE IS RE C EIVED B Y THE
AC C OUNT WITH RE C EIVED B Y THE B ANK
T HE B ANK OR SAID B ANK
ACC OUNT HAD
B EE N CL OSED OR
GAR NISHED
 Cases when bank may refuse
payment

DR AWER HAS HOL DER R EFUSE S B ANK HAS R EAS ON CHE C K IS STALE
C OUNTER MANDED TO IDENT IFY TO B EL IEVE T HAT OR POST DAT ED
PAYMENT HIMS ELF T HE C HEC K IS A
FOR GE RY
SEC. 190. Short Title
NEGOT IA B L E I N STR U M E N TS L AW
 SEC. 191.
Definitions and meaning of terms
ACCEPTED BANK
Acceptance completed by delivery or Any person or association of person
notification carrying on the business of banking,
whether inc. or not

BEARER BILL/NOTE
Person in possession of a bill or note Bill of Exchange/ Negotiable Promissory
which is payable to bearer Note
 SEC. 191.
Definitions and meaning of terms
WRITTEN/WRITING DELIVERY
Includes printed/ includes print Transfer of possession, actual or
constructive, from one person to another

HOLDER INDORSEMENT
The payee or indorsee of a bill or note, An indorsement completed by delivery
who is in possession of it, or the bearer
thereof
 SEC. 191.
Definitions and meaning of terms
INSTRUMENT ISSUE
Negotiable Instrument The first delivery of the instrument,
complete in form, to a person who takes
it as a holder

PERSON VALUE
A body of persons, whether incorporated Valuable consideration
or not
 PRIM ARILY

Sec. 192. Person • The person who is absolutely required to pay

the same as to terms of the instrument
primarily liable on • Bot the principal and surety

instrument • Accomodation maker

SE CO ND A RI LY
• All other parties
• Accomodation guarantor
 DETERMINATION OF
"UN/REASONABLE TIME"
Sec. 193.
Reasonable • The nature of the instrument
time, what • The usage of trade or business with
respect to such instruments
constitutes • The facts of the particular case
 COMPUTATION OF TIME
Sec. 194. Time, how Where the day, or the last day for doing

computed; when last any act herein required or permitted to be

done falls on a Sunday or on a holiday,
day falls on holiday the act may be done on the next
succeeding secular or business day.
 THE PROVISIONS OF THIS
ACT DO NOT APPLY TO
NEGOTIABLE
Sec. 195. INSTRUMENTS MADE AND
DELIEVERED PRIOR TO THE
Application of TAKING EFFECT HEREOF.

Act • the negotiability of the note made

before but transferred after the Act
took effect is not governed by the Act.
Sec. 196. Cases not
provided for in Act

• Where Negotiable Instruments Law is silent, resort must be to existing

legislation and others which may be applicable and by the rules of the law
merchant
Sec. 197. Repeals

• All acts and laws and parts thereof inconsistent with the Act are hereby
repealed.
 THE PROVISIONS OF THIS
ACT DO NOT APPLY TO
Sec. 198. Time NEGOTIABLE
INSTRUMENTS MADE AND
when Act takes DELIEVERED PRIOR TO THE
TAKING EFFECT HEREOF.
effect
• the negotiability of the note made
before but transferred after the Act
took effect is not governed by the Act.