PRESENTMENT FOR PAYMENT

Definition: The presentation of an instrument to the person primarily liable for the purpose of demanding payment

Necessity of presentment for payment (Sec. 70)

a. Against party primarily liable (i.e. maker or acceptor)
- Presentment for payment is not necessary in order to charge the person primarily liable on the instrument (even
if it is required according to the terms of the instrument)
- If the instrument is, by its terms, payable at a special place, and he is able and willing pay it there at maturity,
such ability and willingness are equivalent to a tender of payment upon his part. Thus, if the instrument is not paid
and is overdue, he cannot be considered in delay (he still is not relieved from his liability of paying the amount due)
b. Against party secondarily liable (i.e. drawer and indorsers)
General rule: Presentment for payment is necessary in order to charge the drawer and indorsers. Thus, if the
instrument is not presented to the person primarily liable, drawers and indorsers are discharged from their liability
Exceptions (drawer and indorsers are liable even without presentment for payment):
1. When presentment not required
As to drawer a. Where the drawer has no right to expect or require that the drawee or acceptor will
(Sec. 79) pay the instrument (e.g., drawer has no funds with drawee, drawer has withdrawn funds
from the drawee bank leaving nothing with which to pay the bill, etc.)
b. Where the drawer and the drawee are the same person (in effect, the drawer is
considered a maker, and thus, presentment is not necessary)
As to indorser Where the instrument was made or accepted (not indorsed) for the his accommodation
(Sec. 80) and he has no reason to expect that the instrument will be paid if presented
Note: If presentment is not required to charge the drawer, the indorsers will only be liable if presentment for
payment is made to them (indorsers).
2. When presentment dispensed with (Sec. 82)
a. Where after the exercise of reasonable diligence (active searching), presentment cannot be made
b. Where the drawee is a fictitious person
c. Where there is waiver of presentment (by the drawer or indorser), express or implied
3. When a bill is dishonored by non-acceptance, presentment for payment is not necessary (Sec. 151)

Requisites of sufficient presentment for payment (Sec. 72)

By whom The holder, or by some person authorized to receive payment on his behalf (authority need not be
presented in writing)
To whom General rule: To the person primarily liable on the instrument, or if he is absent or inaccessible, to
presented any person found at the place where the presentment is made
Specific rules on presentment for payment (Note: applicable only if no place of payment is specified;
if there is, presentment should be made at such place):
a. Where principal debtor is dead Must be made to his personal representative, if such there
be, and if with the exercise of reasonable diligence, he can be found (Sec. 76)
b. Where principal debtors are liable as partners Must be made to any one of them, even
though there has been a dissolution of the firm (Sec. 77)
c. Where principal debtors are joint debtors Must be made to them all (Sec. 78)
Where At the proper place, successive and in order (Sec. 73):
presented a. Place for payment is specified in the place specified
b. Place for payment not specified, but address of the person to make payment is given in the
address given
c. Place for payment not specified, address not given at the usual place of business or
residence of the person to make payment
d. Any other case wherever the person to make payment can be found, or at his last known
place of residence
When General rule: Presentment for payment is made on the date fixed without grace
presented Exception: Delay (not the act of presentment itself) is excused when the delay is caused by
circumstances beyond the control of the holder and not imputable to his default, misconduct or
negligence. When the cause of the delay ceases to operate, presentment must be made with
reasonable diligence (Sec. 81)

1. Time of presentment At a reasonable hour on a business day.

Note: Where instrument is payable at a bank, presentment for payment must be made (Sec. 75):
a. During banking hours - if person to make payment has sufficient funds in the bank
b. At any time during the day, before the bank is closed - if person to male payment has no or
insufficient funds in the bank
2. Date of presentment (Sec. 71 & Sec. 85)
a. Instrument payable on demand Within a reasonable time after its issuance (in case of
promissory notes) or after its last negotiation (in case of bills of exchange)
Note: If the date of maturity falls on Sunday or a holiday, presentment must be made on the next
succeeding business day. If the date of maturity falls on Saturday and such is not a holiday, the
holder, at his option, may present the instrument (a) before 12 noon on Saturday or (b) the next
succeeding business day.
b. Instrument payable at a fixed or determinable future time On the date it falls due. Time of
payment is determined by excluding the day from which the time is to run, and by including the date
of payment (Sec. 86)
Note: If the date of maturity falls on a Saturday, Sunday or a holiday, presentment must be made
on the next succeeding business day
How Must be exhibited to the person from whom payment is demanded, and when it is paid, the
presented instrument must be delivered up to the party paying it (Sec. 74)

NOTICE OF DISHONOR
Definition: Bringing, either verbally or by writing, to the knowledge of the drawer or indorser of an instrument, the fact
that a specified negotiable instrument, has not been paid or accepted, and that the party notified is expected to pay it

When instrument dishonored

1. Dishonor by non-payment (Sec. 83)
a. Instrument is duly presented for payment, and payment is refused or cannot be obtained
b. Presentment for payment is excused, and the instrument is overdue and unpaid
2. Dishonor by non-acceptance (Sec. 149)
a. Instrument is duly presented for acceptance, and acceptance is refused or cannot be obtained
b. Presentment for acceptance is excused, and the bill is not accepted

Right of holder when instrument is dishonored (Sec. 84 & Sec. 151)

- Only after giving of due notice of dishonor, an immediate right of recourse to all parties secondarily liable
(drawer and indorsers) accrues to the holder

Necessity of notice of dishonor

a. Against party primarily liable
- Unnecessary, because dishonor (the act itself) is made by parties primarily liable to the instrument
b. Against parties secondarily liable
General rule: Notice of dishonor must be given to the drawer and each indorser (Sec. 89) to inform the parties
secondarily liable that the maker or acceptor has failed to meet his engagement and to advise such parties that
they will be required to make payment. Any drawer or indorser to whom such notice is not given is discharged from
the liability for payment, but not as to breaches of warranties pertaining to the instrument.
Exceptions (drawer and indorser are liable even without notice of dishonor):
1. When notice need not be given
As to drawer a. Where the drawer and drawee are the same person
(Sec. 114) b. Where the drawee is a fictitious person or a person not having capacity to contract
(In instances a and b, holder has the option to treat the bill as promissory note)
c. When the drawer is the person to whom the instrument is presented for payment
d. Where the drawer has no right to expect or require that the drawee or acceptor will
honor the instrument
e. Where the drawer has countermanded payment (orders drawee not to pay)
As to indorser a. Where the drawee is a fictitious person or a person not having capacity to contract
(Sec. 115) and the indorser was aware of the fact at the time he indorsed the instrument
b. Where the indorser is the person to whom the instrument is presented for payment
c. Where the instrument was made or accepted for his accommodation
2. When notice is dispensed with (Sec. 112)
- After the exercise of reasonable diligence, notice cannot be given to or does not reach the parties sought to
be charged
3. When notice waived by drawer or indorser, expressly or impliedly
Notice can be waived either before the time of giving notice has arrived, or after the omission to give due
notice (Sec. 109). A waiver of protest is deemed to be a waiver not only of a formal protest, but also of
presentment and notice of dishonor (Sec. 111).
a. Waiver embodied in the instrument itself waiver binds all parties
b. Waiver written above the signature of the indorser waiver binds said indorser only
4. Where due notice of dishonor by non-acceptance has been given, notice of a subsequent dishonor by non-
payment is not necessary (Sec. 116). However, if in the meantime, the instrument has been accepted after it has
been dishonored by non-acceptance, it is necessary for the holder to present the instrument for payment upon
maturity, and thus, in case of non-payment, due notice of dishonor must be given.
5. An omission to give notice of dishonor by non-acceptance does not prejudice the rights of a holder in due
course subsequent to the omission (Sec. 117)

Requisites for notice of dishonor

BY WHOM GIVEN (Sec. 90)
By holder Notice given inures to the benefit of (Sec. 92):
By another on behalf of holder a. All holders subsequent to the holder who has given notice
b. All prior parties who have a right of recourse against the party to
whom it is given (i.e. parties prior to holder but subsequent to party
who has been given notice)
By any party entitled thereto* Notice given inures to the benefit of (Sec. 93):
By another on behalf of party entitled a. The holder
b. All parties subsequent to the party to whom notice is given
Note: The party entitled thereto is the party to the instrument, who might be compelled to pay it to the holder, and
who, upon taking it up would have a right to reimbursement from the party to whom notice is given. In other words, if
a holder gives notice to one party, the said party can give notice to other parties prior to him. Persons benefited from
the notice given can hold other parties liable even if they themselves did not give notice of dishonor to such parties.

Notice of dishonor may be given by an agent either in his own name or in the name of any party entitled to give
notice, whether that party be his principal or not (Sec. 91). Agent need not be authorized by to give notice. Where the
instrument has been dishonored in the hands of an agent, he may either (Sec. 94):
a. give notice to the parties liable thereon, within the time fixed in this Act
 b. give notice to his principal, within the same time as if he were the holder, and the principal upon receipt of
such notice has himself the same time for giving notice as if the agent had been an independent holder

TO WHOM GIVEN
General rule: Notice must be given to the drawer and to each indorser (Sec. 89). Notice may be given either to the
party himself or to his agent in that behalf (Sec. 97). In this case, an agent must be authorized to receive notice of
dishonor (in contrast to Sec. 91, that an agent need not be authorized to give notice of dishonor).
Specific rules:
Where party is dead and his death is known a. To the personal representative, if there be one, and if with
to the party giving notice (Sec. 98) reasonable diligence, he can be found
b. To the last residence or last place of business of the deceased
Where parties are partners (Sec. 99) To any one partner, even though there has been a dissolution
Where parties are joint parties To each of them, unless one of them has authority to receive such
(Sec. 100) notice for others (Note: joint parties here do not refer to joint
payees or joint indorsees)
Where party has been adjudged a bankrupt a. To the part himself
or an insolvent, or where party has made an b. To his trustee or assignee
assignment for benefit of creditors (Sec. 101)

WHERE GIVEN (Sec. 108)

Where a party has added an address to his signature, notice of dishonor must be sent to the address. But if he has
not given such address, then the notice must be sent as follows:
a. Either to the post-office nearest to his place or residence, or to the post-office where he is accustomed to
receive his letters
b. If he lives in one place and has his place of business in another, notice may be sent to either place
c. If he is sojourning in another place, notice may be sent to the place where he is so sojourning
But where the notice is actually received by the party within the time specified in this Act, it will be sufficient though
not sent in accordance with the requirements of this section.

WHEN GIVEN
General rule: Notice may be given as soon as the instrument is dishonored
Exception: Delay in giving notice is excused when the delay is caused by circumstances beyond the control of the
holder and not imputable to his default, misconduct or negligence (Sec. 113)
Specific rules:
Where parties reside in same place (Sec. 103) Where parties reside in different places (Sec. 104)
a. If notice is to be given at the place of business of the a. If sent by mail, it must be deposited in the post office
person to receive notice, it must be given before the in time to go by mail the day following the day of
close of business hours on the day following (i.e. the dishonor, or if there be no mail at a convenient hour on
day following the day of dishonor) that day, by the next mail thereafter
b. If given at his residence, it must be given before the b. If given otherwise than thru the post-office, then
usual hours of rest on the day following within the time that notice would have been received in
c. If sent by mail, it must be deposited in post office in due course of mail, if it has been deposited in the post-
time to reach him in usual course on the day following office within the time specified in the last subdivision

Notes:
- When a party receives notice of dishonor, he has, after the receipt of such notice, the same time for giving
notice to antecedent parties that the holder has after the dishonor (Sec. 107)

HOW GIVEN
Form of notice: The notice may be (a) in writing or (b) merely oral, and may be given in any terms which sufficiently
identify the instrument, and indicate that it has been dishonored by non-acceptance or non-payment (Sec. 96).
Note: A written notice need not be signed and an insufficient written notice may be supplemented and validated
by verbal communication. A misdescription of the instrument does not vitiate the notice unless the party to whom
notice is given is in fact misled thereby (Sec. 95). However, a mere statement that the instrument is due and
payable is insufficient notice.

Notice of dishonor, in all cases, may be given by:

a. delivering it personally
b. through the mails
- When notice of dishonor is duly addressed and deposited in the post-office, the sender is deemed to have
given due notice, notwithstanding any miscarriage in the mails (Sec. 105)
- Notice is deemed to have been deposited in the post-office when deposited in any branch post-office or in
any letter box under the control of the post-office department (Sec. 106)
DISCHARGE OF NEGOTIABLE INSTRUMENT
Definition: The release of all parties, whether primary or secondary, from the obligations arising under the instrument
rendering it without force and effect, and consequently, no longer negotiable

How instrument is discharged (Sec. 119)

1. Payment in due course by or on behalf of the principal debtor, or by the party accommodated, where the
instrument is made or accepted for accommodation
Requisites (Sec. 88):
a. Must be made at or after maturity of the instrument
b. Must be made to the holder thereof (not necessarily a holder in due course)
c. Must be made by person to make payment, in good faith and without notice that the holders title is defective
2. Intentional cancellation thereof by the holder
Cancellation of an instrument is not limited to the writing of the word cancelled or paid or the drawing of
crisscross lines across the instrument. It includes tearing, erasure, obliteration, burning and mutilation. To effect a
discharge of the instrument, it must be (a) intentionally done and (b) done by the holder thereof.
A cancellation made unintentionally or under a mistake or without the authority of the holder, is inoperative; but
where an instrument or any signature thereon appears to have been cancelled, the burden of proof lies on the party
who alleges that the cancellation was made unintentionally, or under a mistake, or without authority (Sec.123)
3. By any other act which will discharge a simple contract for the payment of money payment or performance, loss
of the thing due, condonation, confusion, compensation, novation, etc. (Art. 1231)
4. When the principal debtor becomes the holder of the instrument at or after maturity in his own right (not in a
representative capacity)

How secondary parties are discharged (Sec. 120)

1. By any act which discharges the instrument
2. By the intentional cancellation of his signature by the holder
3. By the discharge of a prior party (thru the act of the holder, not by operation of law)
4. By a valid tender of payment made by a prior party
5. By a release of the principal debtor, unless the holders right of recourse against the party secondarily liable is
expressly reserved
6. By any agreement (by the holder and the principal debtor) binding upon the holder to extend the time of payment,
or to postpone the holders right to enforce the instrument, unless (a) made with the assent of the party secondarily
liable, or (b) the right of recourse against such party is expressly reserved

Effect of payment of instrument

1. Paid by party primarily liable instrument is discharged, so are the secondary parties
2. Paid by party secondarily liable (Sec. 121)
a. Instrument is not discharged
b. Party so paying it is remitted to his former rights as regards all prior parties
c. He may strike out his own and all subsequent indorsements, and again negotiate the instrument, except:
- Where instrument is payable to order of a third person and has been paid by drawer
- Where instrument was made or accepted for accommodation and has been paid by accommodated party

Renunciation of holder (Sec. 122)

In favor of whom When made Effect
In favor of secondary party Before, at, or after maturity Such secondary party and the parties subsequent to
him are discharged
In favor of principal debtor At or after maturity Instrument is discharged, provided renunciation is
made absolutely and unconditionally
Note: Renunciation must be in writing, unless the instrument is delivered up to the person primarily liable thereon.
Further, a renunciation does not affect the rights of a holder in due course without notice.

Material alteration
Definition (Sec. 125): It is any alteration which changes the:
a. Date
b. Sum payable, either for principal or interest
c. Time or place of payment
d. Number or the relation of the parties
e. Medium or currency in which payment is to be made
f. Alteration which adds a place of payment where no place of payment is specified
g. Any other change or addition which alters the effect of the instrument in any respect

Effect of material alteration (Sec. 124)

Where a negotiable instrument is materially altered without the assent of all parties liable thereon, it is avoided except
as against a party who has himself made, authorized, or assented to the alteration, and subsequent indorsers. But
when an instrument has been materially altered and is in the hands of a holder in due course, not a party to the
alteration, he may enforce payment thereof according to its original tenor.

Rights of holder
1. Holder not in due course
 - Can enforce instrument against (a) party who has himself made, authorized or assented to the alteration and
(b) subsequent indorsers according to the altered tenor

2. Holder in due course

- Can enforce instrument according to the altered tenor against guilty parties and parties subsequent to the
alteration. However, as against parties prior to the alteration, he can enforce instrument according to its original tenor

ACCEPTANCE
Definition: It is the signification by the drawee of his assent to the order of the drawer. It must not express that the
drawee will perform his promise by any other means than the payment of money (Sec. 132). In other words, tenor of
acceptance must be in the form of money.

How made
General rule: Must be in writing and signed by the drawee (Sec. 132)
Exception: Where there is constructive, not implied, acceptance (Sec. 137)
a. Where the drawee to whom a bill is delivered for acceptance destroys the bill (must be willful, not accidental)
b. Where the drawee refuses to return the bill accepted or non-accepted to the holder, within 24 hours after such
delivery or within such other period as the holder may allow (if there is bad faith, retention of bill may be deemed
equivalent to refusal, and thus a constructive acceptance)

Where made
a. On the bill itself
b. On a paper other than the bill itself
Where an acceptance is written on 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 (Sec. 134). In addition, the
holder of a bill presenting the same for acceptance may require that the acceptance be written on the bill, and if
such request is refused, may treat the bill as dishonored (Sec. 133)

General rule: The paper, other than the bill, containing the acceptance must be shown (not merely notified) to the
person to whom the instrument is negotiated. This is an acceptance of an existing bill.
Exception:
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 (Sec. 135). In this case, acceptance is in a
separate paper, but it need not be shown to person to whom the instrument is negotiated to bind the acceptor. This
is an acceptance of a future or a non-existing bill.

When made (Sec. 138)

a. Before the bill has been signed by the drawer or while otherwise incomplete
b. After it is overdue
c. After it has been dishonored by non-payment
d. After it has been dishonored by a previous refusal to accept
- In this case, when a bill payable after sight is dishonored by non-acceptance, and the drawee subsequently
accepts it, the holder, in the absence of any agreement, is entitled to have the bill accepted as of the date of
first presentment.

Note: The drawee is allowed 24 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 (Sec. 136). Where a bill is duly presented for acceptance
and is not accepted within the prescribed time, the person presenting it must treat the bill as dishonored by non-
acceptance or he loses the right of recourse against the drawer and indorsers. (Sec. 150)

Kinds of acceptance (Sec. 139)

1. General acceptance Assents without qualification to the order of the drawer. Acceptance which is consistent with
the tenor of the instrument
2. Qualified acceptance (Sec. 141)
a. Conditional Payment by acceptor is dependent on the fulfilment of a condition therein stated
b. Partial Acceptance to pay part only of the amount for which the bill is drawn
c. Local Acceptance to pay only at a particular place. However, an acceptance to pay at a particular place is a
general acceptance unless it expressly states that the bill is to be paid there only and not elsewhere (Sec. 140)
d. Qualified as to time
e. Acceptance of some, one or more of the drawees, but not of all

Rights of parties as to qualified acceptance (Sec. 142)

- The holder may refuse to take a qualified acceptance and if he does not obtain an unqualified acceptance, he
may treat the bill as dishonored by non-acceptance
- Where a qualified acceptance is taken, the drawer and indorsers are discharged from liability on the bill, unless
(a) they have expressly or impliedly authorized the holder to take a qualified acceptance or (b) subsequently
assented 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

PRESENTMENT FOR ACCEPTANCE

Definition: The production or exhibition of a bill of exchange to the drawee for his acceptance or payment

Where presentment for acceptance necessary (Sec. 143)

Presentment for acceptance must be made in order to render any party to the bill liable:
 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
b. Where the bill expressly stipulates that it shall be presented for acceptance
c. Where the bill is drawn payable elsewhere at the residence or place of business of the drawee

Note: The holder of a bill, which is required to be presented for acceptance, must either (a) present it for acceptance
or (b) negotiate it within a reasonable time. If he fails to do so, the drawer and all indorsers are discharged (Sec. 144).

Where presentment for acceptance excused (Sec. 148)

Presentment for acceptance is excused and a bill may be treated as dishonored by non-acceptance:
a. Where the drawee
- is dead
- has absconded
- is a fictitious person
- is a person not having capacity to contract by bill
b. Where, after the exercise of reasonable diligence, presentment cannot be made
c. Where, although presentment has been irregular, acceptance has been refused on some other ground

How made (Sec. 145)

Presentment for acceptance must be made:
a. BY WHOM: By or on behalf of the holder
b. WHEN: At a reasonable hour on a business day before the bill is overdue
- A bill may be presented for acceptance any day on which negotiable instruments may be presented for
payment (Sec. 146). Same rules apply, except for date falling on a Saturday which is not a holiday. In such a
date, presentment for acceptance may be made before 12 noon on that day, regardless if the bill is payable
on demand or at a fixed or determinable future time.
- Delay in making presentment for payment is excused when such delay is caused by presenting the bill for
acceptance, with the exercise of reasonable diligence, at a place other than the place where the bill is drawn
payable. This delay does not discharge the drawers and indorsers (Sec. 147)
c. TO WHOM: Generally to the drawee or:
- To all drawees, where a bill is addressed to two or more drawees who are not partners
- To one drawee, where a bill is addressed to two or more drawees who are not partners, but such drawee
has authority to accept or refuse acceptance
- To personal representative, where the drawee is dead
- To the drawee or his trustee or assignee, where the drawee has been adjudged a bankrupt or an insolvent

PROTEST
Definition: The formal instrument executed by a notary public or other competent person certifying that the facts
necessary to the dishonor of the instrument by non-acceptance or non-payment have taken place

Necessity of protest
- Where any negotiable instrument has been dishonored, it may be protested for non-acceptance or non-
payment, as the case may be; but protest is not required, except in the case of foreign bills (Sec. 118)
- Where a foreign bill appearing on its face is dishonored by non-acceptance, it must be duly protested for non-
acceptance, and where such a bill, which has not been previously dishonored by non-acceptance is dishonored by
non-payment, it must be duly protested for non-payment. If it is not so protested, the drawer and indorsers are
discharged (Sec. 152)
- A bill protested for non-acceptance may be subsequently protested for non-payment (Sec. 157)
- Where a bill does not appear on its face to be a foreign bill, protest thereof in case of dishonor is unnecessary
- Protest is dispensed with by any circumstances which would dispense with notice of dishonor (Sec. 159)

How made (Sec. 153)

a. Must be annexed to the bill or must contain a copy thereof
b. Must be under the hand and seal of the notary making it
c. Must specify:
- The time and place of presentment
- The fact that presentment was made and the manner thereof
- The cause or reason for protesting the bill
- The demand made and the answer give, if any, or the fact that the drawee or acceptor could not be found
Note: When a bill is lost or destroyed or is wrongly detained from the person entitled to hold it, protest may be
made on a copy or written particulars thereof (Sec. 160)

By whom made (Sec. 154)

- Either (a) by a notary public or (b) by any respectable resident of the place where the bill is dishonored, in the
presence of two or more credible witnesses

When made (Sec. 155)

General rule: When a bill is protested, such protest must be made on the day of its dishonor
Exceptions:
a. When delay is excused, i.e. delay is caused by circumstances beyond the control of the holder and not
imputable to his default, misconduct or negligence (Sec. 159)
b. When a bill has been duly noted, the protest may be subsequently extended as of the date of the noting

Where made (Sec. 156)

General rule: A bill must be protested at the place where it is dishonored
Exception: When a bill, drawn payable at the place of business or residence of some person other than the drawee,
has been dishonored by non-acceptance, it must be protested for non-payment at the place where it is expressed to
be payable, and no further presentment to, or demand on, the drawee is necessary

Protest for better security (Sec. 158)

Where the acceptor has been adjudged a bankrupt or an insolvent or has made an assignment for the benefit of
creditors, before the bill matures, the holder may cause the bill to be protested for better security against the drawers
and indorsers

ACCEPTANCE AND PAYMENT FOR HONOR

Acceptance for honor
As to its Bill has been protested for dishonor by non-
nature (Sec. acceptance or protested for better security
161 & 171) Bill is not overdue at the time of acceptance
for honor
Any person not being a party already liable
(i.e. stranger) may intervene and accept the
bill supra protest
Done for the honor of any party liable thereon
or for the honor of the person for whose
account the bill is drawn
Consent of the holder is required
How made An acceptance for honor must (Sec. 162):
a. be in writing
b. indicate that it is an acceptance for honor
c. be signed by the acceptor for honor
Note: Where an acceptance for honor does
not expressly state for whose honor it is
made, it is deemed to be an acceptor for the
honor of the drawer (Sec. 163)
Payment for honor
Bill has been protested for non-payment
Bill is overdue at the time of payment for honor
Any person, whether a party to the bill or not, may
intervene and pay the bill supra protest
Done for the honor of any party liable thereon or
for the honor of the person for whose account the
bill is drawn
Consent of the holder is not required. Holder
cannot refuse payment. Where the holder of a bill
refuses to receive payment supra protest, he
loses his right of recourse against any party who
would have been discharged by such payment
(Sec. 176)
The payment for honor supra protest, in order to
operate as such, and not as a mere voluntary
payment:
a. Must be attested by attested by a notarial
act of honor which may be appended to the
protest or form an extension to it (Sec. 172)
b. Such notarial act of honor must be founded
on a declaration made by the payer for honor, or
by his agent, declaring his intention to pay the bill
for honor and for whose honor he pays (Sec. 173)

Note: If above formalities are not followed, the

Number of The acceptance for honor may be for part
parties only of the sum for which the bill is draw; and
where there has been an acceptance for
honor for one party, there may be a further
acceptance by a different person for honor of
another party (Sec. 161)
Effects 1. The acceptor for honor is liable to the
holder and to all parties subsequent to the
party for whose honor he has accepted (Sec.
164)
2. The acceptor for honor, by such
acceptance, engages that he will, on due
presentment, pay the bill according to the
terms of his acceptance, provided:
a. Drawee has not yet paid the bill
b. Bill has been duly presented for
payment and protested for non-payment
c. Notice of dishonor is given to him
(Sec. 165)
payment will operate as a mere voluntary
payment, and the payer acquires no right to full
reimbursement.
Where two or more persons offer to pay a bill for
the honor of different parties, the person whose
payment will discharge most parties to the bill is to
be given the preference (Sec. 174)
1. All parties subsequent to the party for whose
honor it is paid are discharged
2. Payer for honor is subrogated for, and
succeeds to, both the rights and duties of the
holder, as regards the party for whose honor he
pays and all parties liable to the latter
(Sec. 175)
3. The payer for honor, on paying the holder, the
amount of the bill and the notarial expenses
incidental to its dishonor, is entitled to receive
both the bill itself and the protest (Sec. 177)

Miscellaneous provisions in acceptance for honor

1. Where a bill payable after sight is accepted for honor, its maturity is calculated from the date of the noting for non-
acceptance, and not from the date of the acceptance for honor (Sec. 166)
2. Where a dishonored bill has been accepted for honor supra protest or contains a referee in case of need, it must
be protested for non-payment before it is presented for payment to the acceptor for honor or the referee in case of
need (Sec. 167)
3. Presentment for payment to the acceptance for honor must be made as follows (Sec. 168):
a. If it is to be presented in the place where the protest for non-payment was made, it must be presented not later
than the day following its maturity
b. If it is to be presented in some other place than the place where it was protested, then it must be forwarded
within the time specified in Sec. 104.
4. The provisions of Sec. 81 apply where there is delay in making presentment to the acceptor for honor or referee in
case of need (Sec. 169)
5. When the bill is dishonored by the acceptor for honor, it must be protested for non-payment by him (Sec. 170)