SARIP, SAMSIA O.

1
Presentment for payment:
1. When presentment for payment is necessary and not necessary. NOT DISHONORED: no presentment/not excused presentment although it is already overdue
2. Effect of making and non making of presentment. AND unpaid
3. Date of presentment for payment
4. Requisites for a sufficient presentment for payment SEC. 84 kanus-a maliable si SECONDARILY LIABLE
a. Section 73. Place of presentment Requisites: para-MALIABLE si secondary party.
5. How presentment for payment is made. 1. Presentment was properly made
6. Presentment where instrument is payable at a bank 2. The primary party DISHONORED the instrument
7. Presentment for payment if principal debtor is: 3. The HOLDER notifies the primary liable of the dishonor
a. Dead  Effect: The HOLDER has an immediate right of recourse to all parties secondarily liable.
b. Partners However, such right will accrue ONLY AFTER THE GIVING OF NOTICE OF DISHONOR.
c. Joint debtors  Check: before Sec. 84 can apply: the HOLDER must present for payment WITHIN A
8. When presentment for payment is not required to make the secondary parties LIABLE. REASONABLE TIME AFTER ITS ISSUE.
GR: presentment for payment is necessary for the drawers and indorser liable  Right of recourse to all parties secondarily liable – right of the holder to enforce the
XPN: liabilities of the secondary liable, as provided in Sec. 61, 65 and 66.
a. Section 79. - Such right was immediate because the holder may immediately bring suit against the
b. Section 80 secondary liable and the latter shall not interpose that a suit first must be filed
c. Section 82. against the primary liable.
9. When DELAY in making presentment for payment is EXCUSED.
There is presentment but delayed. SEC. 85. Time of maturity
Above: NO PRESENTMENT was MADE because the making is excused.  THE instrument must be payable at a fixed time, maturity date:
10. Instances when the instrument is dishonored by non-payment. GR: time fixed in the instrument without grace period. Dili gyud ka mag hatag of grace
11. Effects of dishonor by non-payment period.
12. Time of maturity of instrument XPN: if grace is provided in the instrument, it is payable on the last date of grace.
13. Time of maturity, how computed.
14. Rule when instrument is payable at a bank.  Maturity date is:
15. PAYMENT in due course and its effect. a. Sunday or holiday: shall be payable on the next succeeding business day provided
that it is a time instrument
b. Saturday — on the next succeeding business day provided that it is a time instrument
SECTION 83. When an instrument is dishonored. XPN: shall be presented before 12PM (12 noon) on Saturday, provided that:
1. Non-payment upon DUE presentment = nag PRESENT si HOLDER kaso WALA GIBAYARAN I. D—The instrument is payable on DEMAND
ni PS-liable. II. O—At the option of the holder
- An instrument is dishonored BY NON-PAYMENT as long as it is not PAID although the III. H—Saturday is not a HOLIDAY
primary party may be willing to pay.
2. Non-payment without presentation = wala gi PRESENT ni holder ang instrument kay The GR is for the benefit of the debtor.
EXCUSED siya from doing so (in effect, there’s no need for presentment), kaso ang The reason for the XPN: it is presumed that the primary liable has the money at ant
instrument is OVERDUE AND UNPAID (AND ang gigamit sa LAW and NOT OR) time fo payment.
- Requisites: presentment is excuse, but the instrument is overdue AND unpaid
- E.g presentment is WAIVED (not needed) but INSTRUMENT is overdue and unpaid. c. On Friday but a holiday, then the instrument shall be payable on SATURDAY.
Non-payment upon DUE Non-payment without However, the presentment for payment must be in the next succeeding business
presentment presentation day.
Problem: ang LIABLE, ayaw Ang INSTRUMENT itself, tho
niyang mag bayad making presentment is SEC 86. Time of maturity, HOW COMPUTED:
excused the instrument is  Instrument is payable at a FIXED PERIOD, AFTER DATE, AFTER SIGHT, or AFTR THE
“defect” HAPPENING OG A SPECIFIED EVENT, the time of payment is computed by:
Dishonor reason: PS LIABLE Because of the instrument — Excluding the day from which time is to begin to run (even if it is holiday), and
itself — Including the date of payment
SARIP, SAMSIA O. 2
 PRIMARY LIABLE has all the last day to make payment. Hence, an action brought on the Note: 1 and 2 = PRESENTMENT was made , while 3 = NO PRESENTMENT was made because it
DATEE OF MATURITY = PREMATURE. is excused.

SEC. 87 SEC 89. To whom NOD must be made

Instrument is payable AT a BANK = order to the bank to pay the same for the account of the 1. Notice of dishonor is bringing either verbally or in writing, to the KNOWLEDGE of the
principle debtor thereon / ORDER TO PAY ADDRESSED TO THE BANK drawer or indorser of an instrument, the fact that a specified negotiable instrument,
UPON PROPER PROCEEDINGS taken, has NOT BEEN ACCEPTED OR PAID and that the party
1. The bank may charge the account of the maker/drawer without necessity of getting notified is expected to pay it.
additional authority from the latter. (May order ni maker/drawer nga bayran using it’s
account) Protest – if notice given by a notary public.
- Implied authority from the maker or drawer but not to assign the instrument
2. Applicable if it is payable AT A SPECIFIC BANK; written in the instrument that it is payable 2. TO WHOM IT must be GIVEN:
to e.g. BDP, NETWORK BANK, BPI etc. a) DRAWER AND
- Otherwise, the instrument is not to be considered as authority. b) Each INDORSER
- The holder is not required to give notice to ALL indorsers, he may select to hold only
SEC. 88 PAYMENT IN DUE COURSE (liable to pay) one or some of the indorsers, and those who was not given are discharged
Requisites:
1. WHEN:Payment is made at or after the maturity of the instrument 3. Object of NOTICE of dishonor:
- NOT BEFORE a) Inform the drawer or indorsers (parties secondarily liable) that the maker or
2. WHOM: HOLDER of the instrument acceptor has failed to meet his engagement
3. BY: Maker/drawer : b) Advice the parties secondarily liable that they will be required to make payment.
1. In Good faith
2. Is without notice of the holder’s defective title Purpose of giving NOTICE OF DISHONOR
- Preserves the right of the holder to recover on the instrument
4. WHAT to be paid: MONEY. - Enforce the liability of the drawer or indorsers thereon
— In NIL the promise or oder is to pay a sum certain in money.
— Except, if there is an agreement at the option of the HOLDER. Sec. 5 (d) Notice of non-payment is no longer necessary if notice of non-acceptance has been given. Non
acceptance = payment will be refused

4. EFFECT OF FAILURE TO GIVE NOTICE:

CHAPTER 7. NOTICE OF DISHONOR Any DRAWER and INDORSER who was NOT GIVEN any notice of dishonor is discharged
from the instrument.
After ma-dishonor ni primary parties ang instrument, then determine whether or not the However, they are still liable for breach of warranties pertaining to the instrument (Sec.
secondary parties can be held liable. 65/66).

Secondary parties are Secondary parties are 5. BURDEN ON HOLDER TO PROVE NOTICE GIVEN
liable NOT LIABLE - The burden of proving due notice or that notice was waived or excuse is on the
Notice of Dishonor was Notice of dishonor was holder.
made to them by the not made by the HOLDER - If waived ang notice = si secondarily liable ang mag-waived, pasabot, no need for
HOLDER notice para ma held liable siya or automatic na nga liable siya bahalag walay notice.
Hence, even if the holder did not notify secondarily, the latter may still be liable.
When an instrument is considered dishonored: Burden of proving the same is on the holder. Siya man ang makabenefit.
1. NON-ACCEPTANCE by the primary party on presentment for acceptance = BILL - LOSS of the instrument does not excuse compliance with this section.
2. NON-PAYMENT at its maturity = BILL and NOTE Page 308 ILLUSTRATIVE CASE
3. Presentment is excused (no more presentment) but the instrument is unpaid and
overdue 6. INDORSER ENTITLED TO NOTICE OF DISHONOR
Notice is essential; mere knowledge by the indorser of non-payment is not sufficient.
SARIP, SAMSIA O. 3
M—P—A—B—C—D
- Any kind of indorsers are entitled to notice of dishonor
a. Accommodation indorser The one who can give NOD:
b. Irregular indorser a. D = holder
b. P or A or B or C, provided that;
- LIABILITIES OF QUALIFIED INDORSER and INDORSER negotiating by delivery i. A party to the instrument
 Sec. 65 does not require presentment while Sec. 66 requires presentment ii. Compelled to pay the holder
(general indorser) iii. Has a right to reimbursement
 Lack of notice of dishonor has no effect on them as they do not undertake to
pay instrument in the event of its dishonor = not liable Sec. 91. Notice given by agent.
BUT liable on their warranties — Warranty Liability (Sec. 65) NOD may be given by an AGENT either:
 General Indorsers — liable only if NOTICE of dishonor has been made. If none, A. In his own name,
discharged but still liable on their warranties B. In the name of any party entitled to give notice, whether that party be his principal
or not
7. WHEN NOTICE OF DISHONOR NOT NECESSARY Agent as sender (Sec. 91) Agent as recipient (Sec.
- Cases mentioned under Section 109, 111, 112, 114, 115, 116 and 117 = liable bahalag 97)
walay notice of dishonor. Need not be authorized Must be authorized to
- Necessary for the to be held liable: drawer and indorsers (any kind of indorsers) by the principal. receive notice for the
- Not necessary AKA still liable pa din: acceptor and maker because they are the one The giving of notice drawer or indorser.
who dishonored and their liability is ABSOLUTE, NOD is not a condition for them to benefits the principal Receipt of notice creates
be liable (kasi nga sila ang magdishonor) (holder) liabilities
a. Joint maker Any person can be an
b. Accommodation maker agent of any party
c. Assignor of a check – notwithstanding the absence of NOD to assignor, the latter entitled to give notice
is liable to assignee Notice may be given Notice may be given in Notice may be given to
the name of the agent or the party himself or to
SEC. 90. NOD may be given: the party entitled to give his agent in that behalf
a. By the holder, notice
b. On behalf of the holder,
c. By any party
i. Party to the instrument Sec. 92. Effect of notice on behalf of the holder
ii. Compelled to pay the instrument to the holder After ma-dishonor, HOLDER must give NOD for the secondary party to be held liable.
iii. Upon taking the instrument, would have the right to reimbursement from
the party to whom the notice was given Effect of giving NOD by the HOLDER or on behalf of the holder: inures to the benefit of:
d. On behalf of the party mentioned in c. 1. All holders subsequent to the holder who has given notice
2. All parties PRIOR to the holder but subsequent to the party whom notice has been
Reasons why the notice must come from the holder: given and against whom they have a right of recourse
- Enable the holder as the person chiefly interested, to fix or waive the liabilities of the Inures to the benefit meaning THEY ARE ALSO NOTIFIED even if no actual notification was made
persons secondarily liable. upon them.

CLEARLY: other persons may give notice, it is not exclusively made by the HOLDER itself.
Persons who cannot give NOD. Even if they gave, NOD = ineffectual:
1. Stranger: no longer liable, and has no interest in the instrument
Unless: he is acting as an agent who is entitled to give NOD.
2. One who wrongfully in possession of the instrument, he has no authority to give NOD
Illustration:
A party can charge a prior party who has received notice of dishonor although he himself has
not given said prior part any NOTICE. The reason for this is that a party entitled to a notice
need to be notified only once.
Notification made by HOLDER to ANY ONE of the indorsers is sufficient to charge parties
subsequent to that party, although no actual NOD was given to them. Because, a party entitled
to a notice need to be notified only once.
SARIP, SAMSIA O. 4
a. Writing, or
b. Oral — if thru telephone, it must be clearly shown that the party notified was really
Sec. 93. Effect where notice is given by or on behalf of a party entitled to give notice. communicated with, that is fully identified as the party at the receiving end of the
The one who gave the notice is not the HOLDER or a person who gave on behalf of the holder. line.

Effect of the notice inures to the benefit of: Sufficient notice — if it contains a copy of the instrument and declares that payment has been
a. HOLDER demanded and refuse
b. All parties subsequent to the party to whom the notice is given including the parties
subsequent to the holder who gave notice Insufficient Notice — mere statement that the instrument is due and payable.
Inures to the benefit meaning THEY ARE ALSO NOTIFIED even if no actual notification was made
upon them. Contents of a notice:
a. Identity of the instrument
A party can charge a prior party who has received notice of dishonor although he himself has b. The fact that it has been dishonored by non-acceptance or non-payment
not given said prior part any NOTICE. The reason for this is that a party entitled to a notice c. A statement that the party giving notice intends to look the party addressed for
need to be notified only once. payment.
Same reasoning as above, but the notification was given by the party entitled to give notice.
How notice is given:
a. Personal delivery or
Sec. 94. When agent may give notice b. Mail

The agent may give notice: Defect in notice:

a. When the instrument is dishonored in his hands 1. Lack of signature or insufficiency of a written notice — does not invalidate the notice. The
b. Give notice to: insufficiency may be supplemented and validated by oral communication.
i. Principal or
ii. Directly to parties secondarily liable without notifying his principal 2. GR: Misperception of instrument or other defects does not invalidate the notice

Notice to the principal Notice to the parties XPN: When the person to whom the notice is to be given was mislead by it.
secondarily liable
When notice of dishonor Agent must notify within Within the time fixed by 3. Lack of statement of recourse to indorser — a notice of dishonor need not state that the
is given: the same time referred Sections 102-104 and sender looks to the indorser for payment, where it may be inferred that the indorsee looks
to as if the agent was a 107 to the indorser, and no other inference could reasonably be drawn from the notice.
holder
If no NOD: they are Sec. 97. See Sec. 91
Duty ni principal after discharged, unless
being notified: principal himself notifies
He has also the time for them within the same Sec. 98-101. Parties receiving notice is/are: dead, partners, persons jointly liable, or
giving NOD to the parties time bankrupt
secondarily liable as if
the instrument was 1. Person receiving notice is DEAD
dishonored on the day When the party sought to be charged is dead, the notice of dishonor must be given to the
that he received the personal representative of the decedent, provided that:
notice. 1. Decedent’s death is known to the party giving notice
2. There is personal representative
3. If with reasonable diligence the personal representative can be found.
Sec. 95-96 When notice is sufficient/Form of notice
There is a personal representative when:
Form of notice A. An executor is named in the will but not yet approved by the court
SARIP, SAMSIA O.
B. Notice sent to the ‘estate of’ a deceased indorser
NOTICE TO ONE OF THE PERSONAL REPRESENTATIVES is sufficient notice.
There is no duty to give notice to the personal representative:
1. The death is NOT known to the person giving notice
2. There is no personal representative
3. If there is, but with reasonable diligence he cannot be found
Then, the party giving notice may sent the notice to the LAST RESIDENCE OR PLACE OF
BUSINESS of the deceased.
5
- The holder or his agent, has the entire one day to give notice.
- NOD can be given only after the instrument has been actually dishonored.
- If given before maturity, NOD is premature and ineffective. Though, the other person
intended not to pay the instrument.
- An instrument cannot be dishonoured by nn-payment until after the maturity.
- Early notice (earlier than the date provided by law but not before maturity) —
purpose not only to charged secondarily liable but also for the latter to have an
opportunity to discharge the note.
Sec. 103. Where parties reside in same place.

If the person giving and the person to receive notice RESIDE IN THE SAME place, notice may be
2. Persons receiving notice are PARTNERS given either by:
How notice is made: notice to ANY one partner is notice to the firm even though there has
been a dissolution. A. Personal (option is given to the giver of NOD)
- Every partner is an agent of the partnership. Hence,, notice to a partner is notice to i. At the place of business of the person to receive noice —> TIME —> before
the partnership the close of business hours on the following day
- This is still applicable is the partner has fraudulently suppressed the notice ii. At the residence of the person to receive notice —> TIME —> before the
- This is not applied to the individual undertaking of the partner. usual hours of rest on the day following.
 Notice is sufficient when given during any hours when the members
3. Persons receiving notice are jointly liable of the household are attending to their ordinary affairs.
- Notice shall be given to; B. Mail
a. each persons and upon failure to give such notice, NEITHER could be charged, - NOD must be deposited in the post office in time to reach the person to receive it in
because as to them, each must have SEPARATE notice, or usual course on the day following.
b. The person who is authorized to received the notice. - It is immaterial whether that through the miscarriage in the mails or for any cause
- This section does not refer to JOINT payees or indorsees. not imputable to the sender, the notice does not reach the addressee the day
4. Notice to bankrupt following the dishonor.
- The party secondarily liable s either:
a. Declared a bankrupt or an insolvent, or
b. Made an assignment of his properties for the benefit of creditors (AKA: debtor Sec. 104. Where parties reside in different places.
si 2ND sa laing tao)
- NOTICE is given either to: Notice may be given either by:
a. The secondarily liable himself, or A. Sent by mail, either deposited in the post office (Sec. 106)
b. His trustee or assignee i. in time to go by mail the day following the dishonor
- The holder is required to file his claims in the insolvency proceedings and to prove  go by mail – actual departure in the course of mail from the post office
the giving of due notice before he can enforce his rights against the secondarily in which the notice was deposited, in case there s a mail from that
liable. post office to the destination of the notice at a convenient hour in the
required day,
Sec. 102. Time within which notice must be given. ii. If no mail at a convenient hour on that day, by the next mail thereafter
 Convenient — has reference to the sender.
GR: notice may be given as soon as the instrument is dishonored  If wala siya kaabot sa convenient day on “that” day then mail shall be
XPN: delay is excused and must be given within the times fixed by the NIL. made the next day within the convenient day.

Section 103 — same place of residence B. Other than through the post office:
Section 104 — different place of residence
Section 109 — delay in giving NOD is excused.
SARIP, SAMSIA O.
- Given within the time that notice would have been received in due course of mail, if
it has been deposited in the post office within the time specified in the last
subdivision.
 Personal messenger
 What is important was that the receiver should receive the NOD not
later than the time he. Would have received it had been it mailed
 The burden us upon the holder to rove that the notice was mailed within the time
prescribed, it is not enough merely to show that the notice was deposited in the post
office on the day following the dishonor.
Sec. 105. When sender deemed to have given due notice.
Notice by mail is deemed to have been properly made:
a. Notice of dishonor is duly addressed
b. Deposited in the post office
- As long as the sender has done everything which the law requires him to do, the
notice would still be considered on time although it does not reach the addressee
due to miscarriage in the mails.
- The sender should not be a part of the miscarriage.
- The burden of proof rests upon the plaintiff to show a compliance with the statutory
provisions n order to hold the indorser (drawer) as the liability of the indorse
depends upon compliance as to notice.
Sec. 106. Deposit in post office, what constitutes.
Act of depositing in the post office: Deposit in the:
A. Post office
B. Branch of any post office
C. Any letter box under the control of the pos office.
Proper deposit in the post office, example:
A. Deposit in the mail box
B. Delivery to mail carrier while making his rounds
Not a proper deposit in the post office:
A. Notice properly addressed and left in the place in the notary’s office where mail was
usually collected by he postman
Sec. 107. Notice to subsequent party; time of.
Party who receives notice of dishonour is entitled to give nod to prior parties within the same
period of time that he holder has after the dishonor as if he were the holder.
6
AKA: The instrument is considered dishonored in the hands of a party who receives a NOD
from the holder n the date he receives such notice and NOT on the date the instrument is
dishonored in the hands of the holder.
Sec. 108. Where notice must be sent.
Place where notice must be given:
A. Party added an address to his name – NOD must be sent to that place
- It is still sufficient even though the address is an incorrect one
B. If the party did not add: NOD must be sent:
i. Either to the post office nearest to his place of residence or where he is
accustomed to receive his letters
 Residence – temporary, partial or even constructive residence.
 The holder is burdened to discover the place or residence and to send the
NOD to the nearest post office.
ii. If the person to receive NOD lives in one place, and have his place of
business in another —> NOD may be send to either place
 Place of business — place where he carries on business as merchant,
tradesman, professional man or other similar trade or calling.
 Same place of residence and place of business = NOD must be sent to his
residence
iii. The person to receive the NOD sojourns in another place, —> NOD sent
where he is sojourning
 Sojourning — applies to a temporary residence.
 But where the notice is actually received by the party within the time specified in
this Act, it will be sufficient, though not in accordance with the requirements of this
section.
- So bahalag not sent in the proper place provided in this section, there is still sufficient
sending of NOD if the party actually receives it.
- However, mass strict if the issue is TIME: ALWAYS FOLLOW THE LAW.
Sections 103-104 pertain to the TIME when NOD must be sent.
Section 108 pertains to the PLACE
Sec. 109. Waiver of notice.
Waiver of NOD:
- Willingness on the part of the drawer or indorser to be bound as such even without
due notice of dishonor. Prior indorser are discharged from their liability to such
indorser.
 When given:
a. Before the time of giving notice (Sec. 110)
SARIP, SAMSIA O.
b. After omission to give due notice
 Form of waiver:
a. Express – made orally or n writing as when “notice of dishonor” appears above
the signature of an indorser.
b. Implied – inferred from act or language
 Usually takes after there has been omission to give notice.
 Payment of interest by an indorser after he learns of the default
of the maker
 Admission of liability after dishonor
 Promise to pay the note if the maker does not pay
 Suggesting a plan of settlement
Sec. 110. Whom affected by the waiver.
Persons affected by waiver, depends on where the waiver is written:
A. Waiver is embodies in the instrument itself — it binds all PARTIES
- Waiver is written on the body or FACE o the instrument
- The holder, in whose hands the instrument was dishonored, is not required to give
NOD to any body (indorsers/drawer) in order for the latter to held liable , because
the waiver is a part of the contract not only of the maker but also of the indorsers.
7
WHEN: after the exercise of reasonable diligence, it can not be given or does not reach the
parties sought to be charged.
Effect:
Reasonable diligence — depends upon the circumstances of each case.
A. The holder should endeavor to finds out the whereabouts of the party notified.
(Mag-attempt jud siya iyang pangitaon)
Sec. 113. Delay in giving notice of dishonor; how excused
Reiteration of Section 81 — when presentment is dispensed with
Section 112 — NO NOD was made because EXCUSED
Section 113 — there is NOD but was delayed, nevertheless the delay excused = proper NOD;
indorser is charged
When delay is excused:
a. The delay is caused by circumstance beyond the control of the holder, and
b. Not imputable to his default, misconduct, or negligence.
In the meantime, the holder will not give NOD. But after the cause of delay ceases to operate,
NOTICE UST BE GIVEN WITH REASONABLE DILIGENCE.

B. Waiver is written above the signature of an indorser, it binds only him

- The holder should give NOD to the other indorsers for them to be liable. Sec. 114. When notice need not be given to drawer.
(Dispensed with, still liable si drawer tho no NOD was given)
Sec. 111. Waiver of protest.
When NOD to drawer is not required:
Effect of waiver or protest a. Drawer and drawee are the same person
 Protest – formal instrument executed usually by a notary public certifying that the b. Drawee is a fictitious person or a person not having capacity to contract
legal steps necessary to fix the liability of the drawee and the indorsers have been  A and B — the holder is given the option under Section 130 to treat the bill as a
taken. promissory note. The drawer will be regarded as a maker and a primary party.
 Strictly, this applies to foreign bills but as the time goes by, inland bills may also Hence, siya ang nag-DISHONOR. And NOD is not anymore needed, NOTICE TO
be applicable HIMSELF ganun? Notice = superfluous.
 Protest is waived, what is also waived: c. Drawer is the person to whom the instrument is presented for payment
a. Presentment  The drawer has knowledge of the dishonor since he is the one who dishonored
b. Notice of dishonor the instrument.
 Protest means all the steps accompanying dishonor necessary to charge a party  Example sa book: PAGE 334.
secondarily liable d. Drawer has no right to expect or require that the drawee or acceptor will honor the
 Waiver of NOTICE of protest – waives the notice and not the presentment instrument. Examples:
 PRESENTMENT is waived – NOTICE is also waived, not vice versa  When the drawer has nor account with the drawee-bank
 Effect: the indorser enlarges his liability and his indorsement is known as  Drawer has no funds with the drawee-bank to meet the liability. However, this
facultative indorsement. is not the absolute rule, the drawee may have agreed to advance the amount
for the drawer who has a reason to expect the drawee to accept it to pay.
Sec. 112. When notice is dispensed with.  There is no existing contractual relations between the drawer and the drawee
e. Drawer has countermanded (revoke/recall) payment
SARIP, SAMSIA O.
 Also known as stop payment order (STO) — drawer orders the drawee not to
pay
 Happens when the check was lost or when the drawee does not receive the
value he expected when he issued the check.
 Only the drawer has the right to order stop payment.
Sec. 115. When notice need not be given to indorser.
(Same scenario sa taas)
When notice to indorser is not require:
A. Drawee is a fictitious person or a person not having capacity to contract, and the
indorser was aware of the fact at the time he indorsed the instrument
 Same sa Section 114 (b), the only difference was that, the indorser must knew
of the fact that the drawee is fictitious.
 If he knew = he knew that presentment cannot be made to a fictitious person
and NOD cannot be made. (DILI MA DISHONOR)
 If however, he knew that the maker was insolvent or the instrument had been
dishonored — NOD is not dispensed with
B. Indorser is the person to whom the instrument is presented for payment.
C. Instrument was made or accepted for his accommodation
 Indorser = accommodated party, and an accommodated party = principal
debtor (as if the maker, not entitled to notice)
Sec. 116. Notice of non-payment where accepted refused.
If a BILL is dishonored by non-acceptance:
GR: No presentment for payment is necessary since dishonor of the instrument by non-
payment is to be EXPECTED.
 Effect to secondary parties after dishonor by non-acceptance: an immediate
right of recourse against all a secondarily parties accrues to the holder.
 If presented for payment is made and was dishonored – the holder need not
notify again the secondary parties.
XPN: When presentment for payment is needed.
When the instrument is accepted after it has been dishonored by non-acceptance
 The holder is now obliged to present the instrument for payment upon
maturity.
 If dishonored by non-payment — holder must give NOD. Failure to do so will
discharge the secondary parties.
 READ THE EXAMPLE: PAGE 336
Sec. 117. Effect of omission to give notice of non-acceptance.
Effect of omission to give notice of non-acceptance.
- The failure of the previous holder to give a notice of dishonor by non-acceptance
cannot prejudice a holder in due course who may still present the instrument to the
drawee for acceptance and notify the drawer and indorsers if acceptance is refused.
8
WHILE: dishonor by non-PAYMENT:
- No holder subsequent thereto can be a holder in due course because the maturity
of the instrument appears on the face thereof, and therefore, the holder knows of
such dishonor form the fact that the instrument is overdue.
- But any holder ,ay present an instrument for acceptance BEFORE MATURITY and in
order to dishonor it, all that the drawee has to do is to refuse to accept it without
having to write anything on the instrument.
Sec. 118. When protest need not be made; when must be made.
When protest required:
- Protest is necessary only in the case of foreign bills of exchange, which have been
dishonored by non-acceptance or non-payment.
- If no protest was made, the drawer and indorsers are discharged.
OPTIONAL:
Protests for other instruments like: inland bills of exchange, checks and PN, is OPTIONAL except
in cases provided for in Sections 158, 161, and 171.
- Thus, formal protest of a PN by a notary public is not essential to hold an indorser.
- Required: presentment and demand at the time and place provided for in the
instrument, followed by notice to the indorser of such presentment, demand and
non-payment.
Summary rules as to notice fo dishonor
1. Just like presentment for payment, NOD is not necessary to charge persons primarily
liable but is necessary to charge persons secondarily liable
2. In the following cases, ONOD is not necessary:
a. NOD is waived – Sec. 109
b. Protest is waived – Sec. 111
c. Notice is dispensed with – Sec. 112
d. As to the drawer – Sec. 114
e. As ti the indorser — Sec. 115
f. Due NOD by non-acceptance has been given under Sec. 116
g. As to HIDC, without NOD by non-acceptance, subsequent to the omission to give
notice under Sec. 117.