 If an instrument is payable 60 days after date, when do you start counting the 60

days period?
Pay to P order 60 days on days from date sign M. Maker gave instrument to the
Payee, it was given to the Payee on Feb. 1, 2018. The instrument is undated although
the instrument was given or was delivered by Maker to the Payee on Feb. 1 but there
is no date.
X orders Y to pay Z order 1 Million 60 days after sight, accepted Y but the acceptance
was not dated, when is the bill due? What do you understand by after sight?
After sight (sight/kita/mata) = that means the first time that the drawee lays his eyes on the bill.
SIGHT. FIRST TIME NAKIT-AN SA DRAWEE ANG BILL. That is what is meant by after sight. It was given
by the drawer to the payee and the payee went to the drawee for his acceptance, it was accepted but
the acceptance was on Feb. 1, 2018 but the acceptance was not dated. Supposedly in the first example
you count the date of the 60 days period from Feb. 1. In the second example in the bill, you count the 60
days period from Feb. 1 because that is the first time that the drawee saw the bill and accepted it.

 But in both cases class, the Promissory Note or the bill were left undated so you will
not able to determine the due date, isn’t it? So if you were the holder, what are you
going to do? How will you able to determine the due date where in both instances the
instrument were never dated and the date is the reckoning point to determine the
due date here it should be 60 days from present, here 60 days from the acceptance
but the instruments and the acceptance were not dated. So what will you do?
Section 13. The holder may insert the correct day or any day. THE CORRECT DAY OF COURSE.
The true day. Now the court say, in the first example the true day is if you insert Feb. 1 when will the
instrument due to = April 1.
Now, you need money badly, so what you did was instead of inserting the true day,
you inserted Jan. 1, 2018 so that this instrument will be made payable to March 1,
2018 so you inserted the wrong date to hastened the due date, so on March 1 Ms. P
went to M demanded to make payment because it is already 60 days.
Is P a holder in due course? The section 13 says that the instrument will be avoided in the hands
of Mr. P, wala gi sulti pero gi imply sa section 13 diba?
How was it said?
The insertion of a wrong date does not avoid the instrument in the hands of the subsequent
holder in due course but as to him the date so inserted is to be regarded was the..
so what is the implication of that sentence? The insertion of a wrong date will not
avoid the instrument in the hands of a holder in due course.
That means P after the inserting the wrong date negotiates it to A who is a holder in due course
and who took it under circumstances enumerated in Sec. 52 then A can collect from M. In so far as we
say, a holder in due course, the wrong date inserted which is Jan. 1, 2018 is the true date and in so far in
A’s concern a holder in due course the due date is March 1 but what about P? The law seems to be silent
on P because the law says in the hands of the holder in due course thus the insertion of the wrong date
will not affect his command in his hands this is the true, so what is its implication? If in the hands of P,
the instrument is avoided. That is the implication there. So if the instrument is in the hands of P and he
tries to collect from M, he cannot collect. But if you were P who negotiated it to A and to negotiate it to A
so that under circumstances in Section 52 do not tell him you that inserted the wrong date because A will
get hold of this note under Section 52 then he is a holder in due course then the law says that he be a

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holder in due course can collect from M because the wrong date inserted would be the true date in so far
as A is concern.
As far as A’s Concern can he run after P? Assuming A is a holder in due course will
collect to M and M will not pay.
YES, P is liable. Siya (P) ang dili ka collecta pero if A is not able collect from M for some reason or
another, if M dishonours the instrument, A can run after P on the basis of indorsement of P, the
indorsement he is liable because under 65 and 66 an indorser warrants that the instrument is genuine in
all respect but he cannot collect from M because he was the one who inserted the wrong date (P). *The
same principles applies in the other example*
What if he claims that he inserted the wrong date (P)? Can he claim?
NO. HE CANNOT CLAIM. Basta wrong date na iyang e-insert wala na siyay recourse.
Remember: that the secondarily liable will only be liable if the primarily liable does not pay or
dishonours the instrument but before you go through the secondarily liable you have to first make notice
of dishonour as a warranty given by 65 and 66. *applies to other example on the board*

 Section 14 deals with incomplete delivery. Section 15 deals with incomplete

undelivered. Section 16 is complete undelivered.
Section 14, there are 4 sentences. In Section 16, there is also 4 sentences ang pag
basa sa 16 unahon nimu ang first isunod nimu ang fourth isunod nimu ang third ug
ang last ang second ang imu basahon in that order. Ang Section 15 isa ra.
Whether the instrument is payable to order or bearer, there is one indispensible
requirement that should be present in both. THAT IS DELIVERY. Whether it is payable to
order or bearer, there has to be delivery.
In preparing a negotiable instrument, there are two acts:
(a) That is writing and (b) delivery.
What is issue?
Issue is the first delivery. If it is a note, the first issue from the Maker to the Payee. If it is a bill,
the first issue is the first delivery of the Drawer to the Payee subsequent action of this is now
called negotiation. The negotiation will depend on whether it is payable to order or bearer. If it is
payable to order, negotiation is done by delivery with indorsement. If it is payable to bearer,
negotiation is done by mere delivery.
Section 14 first sentence: any instrument lacking in material particular, so
Incompelete blank. INCOMPLETE. Say amount is left in blank. A promissory note was
issued by M to P with the amount left in blank. So that is incomplete but was
delivered by M to P. So if I delivered a Promissory Note to P with the amount left in
blank then there is a prima facie presumption that I authorize P to complete the
instrument. That word prima facie, what does it mean? Is that a conclusive
presumption or disputable? So what is the difference between conclusive and prima
facie?
If it is conclusive then you cannot rebut. If it is disputable, it can be rebutted. Prima facie is
disputable. YES. Instrument incomplete but delivered that is a prima facie or disputable
presumption that the maker authorize the holder to fill the blank.
Section 14 second sentence says that: signature on a blank paper with the intention
of converting it to negotiable instrument, there is a prima facie presumption that the
holder is authorize to fill it up in any amount. So bond paper, pirma diha, ihatag nako
sa imu, ignan taka na you convert it to negotiable instrument you can fill it any

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amount, mao nay gi sulti sa second sentence. But if I put my sign there for the
purpose of comparison so that you can compare my signature with the other
signature without any intention on my part to convert this piece of paper to
negotiable instrument.
Then you are not authorize to fill in or to convert the paper to negotiable instrument.
Section 14 third sentence: in order that the incomplete but delivered instrument can
be enforce against a party whose signature appears before delivery it should be filled
up strictly in accordance with the authority given and within a reasonable time.

PROBLEM: Maker-Payee order blank, Maker delivers the note to payee with instruction
to payee you can fill up the amount but do not exceed 1 million and you should within
one week. So, P inserted 2 million contrary to the authority given by the maker. P
then negotiates the instrument to A to B to C holder in due course. Can C recover
from the maker?.
Section 14(3): applies if the person is not a holder in due course.
Section 14(4): applies if the person is holder in due course.
So let’s go back to the problem, if C is a not a holder in due course can he recover
from M?
NO, because the third sentence says that he can only recover from M if the instrument was filled
up strictly in accordance with the authority given and within a reasonable time.
But the 4th sentence says if he happens to be a holder in due course this time, he can claim from
M as if the instrument strictly in accordance with the authority given and within a reasonable
time.

Section 15: refers to an incomplete undelivered. Now remember, delivery is essential

for the validity of the transfer irrespective of whether the instrument is payable to
bearer or to order, there has to be delivery. Now, what is the effect if Mr. Maker
makes a note P as the Payee and left the amount in blank, Mr. Maker place the paper
inside his drawer. Mr. P opens the drawer get the note and write the amount 2 million
and negotiates it to A who is a holder in due course or A who is not a holder in due
course. Question can A recover from the Maker irrespective if he is a holder in due
course or not.
NO irrespective if he is a holder in due course or not. For the act is theft of an incomplete and
undelivered negotiable instrument. So Section 15 says that if the instrument is incomplete and
undelivered it cannot be enforced by any holder whether the holder is in due course or not, it
cannot be enforce by any holder against a party for affix his signature before delivery.
NGANU NAA MAN WORD DIHA NA DELIVERY SA SECTION 15?
Ang Section 15 refers to any incomplete undelivered. Walay consistency.
UNSAY PASABOT ANANG BEFORE DELIVERY?
Because of issue, YES, it says it cannot be enforce by A irrespective of whether A is a holder in
due course or not against a party whose signature already been there before delivery. NAA BAY
DELIVERY? Naay delivery from P to A, it was na indorsement plus delivery. Diba gi negotiate ni,
diba after pagkawat ni P sa drawer ni M iyang gi fill in the blanks gi butangan niya ug 2 million
dayun iyang gi negotiate kay A. HOW DID P NEGOTIATE? Delivery plus indorsement. So naay
delivery. Section 15 says this instrument cannot be enforce against a party whose
signature was affix before delivery and who is that party here? M, even if the holder is

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a holder in due course. YES because the law says any holder cannot enforce it against M who
affix his signature before delivery. The delivery was affected by P to A. Now second question,
can A recover from P? YES, on the basis of which warranty as indorser under 65 and 66 and
second reason he was the one who inserted the wrong info there is fraud on his part, the more
reason that he should be held liable to A. If he pays A, can P recover from M? NO
because he was the one who inserted the wrong information and section 15 says it cannot be
enforce against a party whose signature was there before delivery.

Section 16. Complete but not delivered. Now the general rule is found in the first
sentence: Every contract on a negotiable instrument is incomplete and revocable
until delivery of the instrument for the purpose of giving effect thereto . DELIVERY.
Kato ako una gi sulti sa inyo, delivery is essential whether it to order or bearer that is
the general rule. Now as I said, kung basahon inyo ang 16unahon ninyo ang first
sentence isunod ninyo ang 4th sentence: Where the instrument is no longer in the
possession of a party whose signature appears thereon, a valid and intentional
delivery by him is presumed until the contrary is proved. Okay now, completo
complete siya. Naa na sa kamot ni P, according to the 4 th sentence there is a
disputable presumption of delivery, naay presumption although it is not conclusive na
naay delivery. The 3rd sentence says: But where the instrument is in the hands of a
holder in due course, a valid delivery thereof by all parties prior to him so as to make
them liable to him is conclusively presumed. So in the hands of a holder in due course
there is a conclusive presumption of delivery kung naay holder in due course and you
have to memorized Section 52. Memorize Section 52 para masabot ninyo siya. The
last sentence says: As between immediate parties, and as regards to remote party
other than a holder in due course, the delivery in order to be effectual, must be made
either by under the authority of the party making, drawing, accepting, or indorsing as
the case maybe; and in such case the delivery may be shown to have been
conditional, or for a special purpose only, and not for the purpose of transferring the
property in the instrument. In the hands of an immediate party or a remote party
who is not a holder in due course, the law says in the hand of a remote party other
than holder in due course, what does it mean?
Ang buot ipa sabot ana, in the hands of a remote party who is not a holder in due course, gi
slang lang niya gamay, pero ang buot ipasabot ana, an instrument in the hands of an immediate
party or remote party not holder in due course must be filled up As between immediate parties,
and as regards to remote party other than a holder in due course, the delivery in order to be
effectual, must be made either by under the authority of the party making, drawing, accepting,
or indorsing as the case maybe; and in such case the delivery may be shown to have been
conditional, or for a special purpose only, and not for the purpose of transferring the property in
the instrument. Unsay pasabot anang immediate party kanang dug-ol? M P A B C D, ani
si P ug si A immediate party to each other? Kanang proximity or is it privity?
PRIVITY.
What’s privity? It does not mean na immediate dug-ol, it’s not proximity, it is privity meaning
dili sila, if you’re saying immediate party doesn’t mean they are proximate, it means privity.
Immediate is somebody who knows the condition of the circumstances under which the
instrument is in.

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So si M nag issue ug note kay P, gi ignan niya si P na ang amount dili mu exceed ug 1
million kani na condition nahibaw-an ni C, si M ug si C are immediate party because C
knew the condition attached to the issuance of the note. If you are going to say proximate,
kinsay proximate kay C? si B or si D kay dug-ol siya. That is not the definition, immediate means
katong naka hibalo sa kondisyones sa pag issue sa kani na negotiable instrument.
What about remote? Katong wala kabalo.
Kung wala siya kabalo, holder in due course siya? YES. Pero kung wala siya kabalo pero
dili siya holder in due course, mahimo japon siyang situation sa immediate party that’s why those
has be paid immediate parties and a remote party who is not or rather than a holder in due
course the delivery in order to in effectual was has been made with the authority of the person of
the Maker, Drawer, Acceptor and Indorser otherwise no can do. But in any instance it can be
shown that the instrument was issued for a special or there is a condition so even in the example
of the 4th sentence or the 2nd sentence. You read the 2nd sentence as between immediate
parties, and as regards to remote party other than a holder in due course, the delivery in order to
be effectual, must be made either by under the authority of the party making, drawing,
accepting, or indorsing as the case maybe; and in such case the delivery may be shown to have
been conditional, or for a special purpose only, and not for the purpose of transferring the
property in the instrument.
Si M nag issue ug note kang P, say for instance 1 million gi ignan niya si P na kini na
note ako ni e-issue sa imu para kanang Kia nako, kana na kondisyones nahibaw-an ni
A, so A is an immediate party as to M because he knew the condition issued on the
note. Even if A does not know that there was a condition, if he is not a holder in due
course. Then in order that A whether he is an immediate party or a remote party that a holder
in due course, in order that the delivery is effectual it must have been made with the authority of
the Maker or the Payee.
Gi indorse nani under authority of the indorser but the law says the maker can show if A
claims payment to him that the instrument was made for a special purpose only or subject to a
condition.

Section 17. The rules in the interpretation:

#1: if the sum payable, there is conflict in the sum payable in words and in figure.
Which one would prevail?
The words.
If there is in the instrument says with interest but it is not indicated then when do
you start regulating the interest.
The reckoning would be the date of the instrument or the date of the issuance.
Then what is the issue?
The first delivery from Maker to Payee or the Drawer to Payee. Subsequent delivery is called
negotiation.
If there is a conflict between written and the printed provision?
The written.
Whether the instrument is ambiguous, nalibog ka kung note siya or a bill, so what
will you do if you were the holder?
The holder may decide whether it would be a promissory note or a bill of exchange. Usually
class, in a bill or rather in a negotiable instrument you will find the signature of the Maker there

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or the signature of the drawer and you will find the signature of the drawee there and the
indorsement is found at the back.
What if you find the signature in the front of the instrument what will you treat the
signee?
You treat him as an indorser. If the promise says “I promise to pay P or order to pay P” and
signed by A & B, the liability of A & B is JOINTLY AND SEVERALLY (synonymous with) SOLIDARY.
If it says “I” and signed by two or more the liability is solidary, of course you know what is
solidary as distinguished by joint liability is.

Section 18 is about the nature of: “NO SIGNATURE, NO LIABILITY”, the

exemption(s):
o signing in a fake or assuming agency.
o Section 19. When agent signs on behalf of the principal.
o Forgery Section 23, parties who are precluded from denying forgery or those in estoppel.
o Section 134 acceptance of a bill on a separate paper.
o Section 135 acceptance of a non-existing bill or acceptance of a future bill.

The signature of a party may be made by his agent, if the signature of the maker was
signed by his agent, who is liable?
As a rule, agent is not liable provided that he is authorized and discloses the principal.

Now, an agent who signs P.P or “Per Procuration”, what is the meaning of P.P?
Simple means that the agent has limited authority so therefore it is incumbent upon the holder
to inquire the limit of the authority of the agent.

Can an infant or corporation indorse an instrument?

You’ve learned in your obligations and contract that the following cannot give consent to a
contract: unemancipated minor, insane person, etc.
Walay consent walay contract. Walay cause walay contract. Kung walay cause walay contact.
Mao na silay impotante na element kanang tulo.
Now, an unemancipated minor, if he enters into a contract = THE CONTRACT IS VOID because
that is a specific provision in contract. However, the exemption is here, what if a minor
indorse the instrument will he transfer title? YES! Section 22, even if the minor may incur
no liability.

FORGERY. WHAT IS FORGERY?

Forgery is when you forge. Counterfeit or imitation of any writing.
What if it’s not counterfeit but no authority will that constitute forgery?
YES. So when you copy the signature of the drawer or the maker, that’s forgery.
When you insert the wrong amount? Section 124 alternation of amount.
If there is forgery, the instrument is non-negotiable? Nagsulti ba ang section one na
pag naay forgery dili na siya negotiable?
The instrument remains to be negotiable even if there is forgery as long as it complies section 1.
Klaru ang gi sulti sa section 23 diba, what is rendered inoperative by false signature, what is
rendered inoperative in forgery is the forged signature. There is no right to retain, there is no
right to demand payment by or under the forged signature.

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Is there an exception that despite there is forgery that the forged signature would
still be effective?
In forgery class, it is the forged signature rendered to be inoperative. The instrument
remains valid, the instrument is still deemed to be negotiable as long as there is no violation in
Section 1. So since the forged signature is inoperative, there is no right to retain the instrument
and to give discharge or to enforce payment by or under the forged signature. REMEMBER, only
the forged signature is inoperative. The genuine signature appearing in the instrument remains
to be operative and has legal effect, so if the signature of the maker is forged by the Payee and
the Payee negotiates it to A by indorsing it, A to B by indorsement, B to C (holder), C cannot
demand payment from the Maker because the signature of the Maker is inoperative but C can
demand payment from Payee, A & B because their signature is genuine. SO REMEMBER, the
mere forgery of the signature of the Maker will not render the instrument inoperative what is
rendered inoperative or has no effect at all is the forge signature and the instrument remains
negotiable so long as there is no violation on Section 1.
Are there exception to the rule?
o Persons precluded in setting up forgery or estoppel
o Indorsers Section 65 and Section 66. Those who warrants the genuineness of the
signature.
o Acceptor under Section 62. Here class in Section 62, if X signature is forged by Z the
payee and he made or address the bill to Y (drawee) for acceptance. Y accepted, how?
By signing his name (Y), that is acceptance under Section 62, Y cannot escape payment
if after acceptance he discovers that the signature of the drawer is forged. What should Y
done is go to the drawer before acceptance to confirm from the drawer if his signature is
genuine. If you look at Section 62, one of the warranties is he admits to the genuineness
of the drawer’s signature by merely accepting and signing his signature, he admits that
the signature of the drawer is genuine and he cannot escape liability.
o Forged signature not necessary to holder’s title under Section 48.

Forgery of an indorsement in a promissory note, what is the effect?

When there is an indorsement in a promissory note it presupposes that the promissory note is
payable to order because there is an indorsement so the effect is that the party whose signature
was forged and parties prior to him including the maker non-liable to holder, the forged
indorsement is the only means coupled with delivery to which the holder acquires payment.
M issues a note to P, you learn that this instrument in order that to be negotiated
validly to A would be indorsed plus delivery. Now X forged the signature of P and he
made it appear it was P and negotiates the instrument to A and negotiates it to B.
Can B recover from the maker?
The right of B(holder) is dependent upon a series of valid indorsement from P to A, A to B
because remember an order instrument can be negotiated by indorsement plus delivery. There
should be an indorsement and if there is a forged indorsement that will cut off the transfer of
valid title. When there is a forged indorsement from P to A and therefore there was no valid
transfer of title from P to A that’s why the law says that the holder cannot demand payment from
parties whose signature are forged and all parties prior to him because the right to transfer title
was cut off by the forged signature of P to A but the holder can demand payment from A
because the indorsement from A to B was genuine and valid. That is the effect if there is a
forged indorsement of a pronote payable to order. If this instrument is a bearer instrument you

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learn that it can be negotiated by mere delivery no need of indorsement, what if there is a
forged indorsement in a bearer instrument? Then the law says that, the parties whose
indorsement forged and parties prior to him including the maker may be held liable by a holder in
due course provided that the pronote is complete before delivery, that is a conclusive
presumption in Section 16 when the note or the instrument is complete then in the hands of a
holder in due course there is a conclusive presumption of valid delivery and therefore if B is a
holder in due course, he can demand payment from M and P and A even if the signature
of P was forged because according to Section 16 there is conclusive presumption of a valid
delivery if favour of the holder B who is a holder in due course and besides indorsement is not
necessary in a bearer instrument so irrespective if there was a forged indorsement that will not
matter because what is required in bearer instrument is mere delivery and in the hands of a
holder in due course there is a presumption of valid delivery and therefore B can demand
payment from M, P and A. What if the holder is not a holder in due course? Well,
according to Section 58 class, please take note, there are real defences and personal defences.
Real defences are those defences that can be interpose against one who is a holder in due
course while Personal defences are those defences that can be interpose against one who is not
a holder in due course. Now, if B is not a holder in due course then he is subject to personal and
real defences. So if you’re holder in due course only real defences may interpose against you.
Example of real defence is forgery; it can be interpose against a holder in due course because a
holder in due course cannot demand payment from the parties whose signature is forged
because the forged signature is inoperative. In section 15, where the instrument is incomplete
and undelivered, it cannot be enforce by any holder, whether he is a holder in due course or not.
Read section 58 which enumerates different real and personal defences. What you need to
remember is that Real defences can be interpose against holder in due course and not a holder in
due course is subject to both personal and real defences. Now forgery of Maker’s signature,
he cannot run after the maker whose signature is forged and therefore inoperative (whether B is
holder in due course or not), can he run after P? YES! 1. P is the forger, 2. P make an
indorsement so therefore he is liable. If he is a holder in due course, he cannot run against P. If
he is not a holder in due course, it would depend if whether P has defences against B who is not
a holder in due course.