SAN BEDA COLLEGE ALABANG

SCHOOL OF LAW
OUTLINE
IN

NEGOTIABLE INSTRUMENTS LAW

1ST Semester, School Year 2015-2016
Saturdays, 9 a.m. to 12 p.m.
RODERICK R.C. SALAZAR III
FORTUN NARVASA & SALAZAR
Tel No. 812-8670/Mobile Phone No. 0917-8489462/e-mail: rrcsalazar@fnslaw.com.ph

Class Rules:
1.

2.
3.
4.
5.

I.

Basis of Grades
i.
Recitation 30%
a.
Minimal reading from notes/laptops;
b.
Unexcused absences failing grade when called for recitation
c.
No talking or texting while others are reciting; mobile phones must be
turned off, otherwise, for confiscation during classhours.
ii.
Surprise Quizzes 5%
iii.
Midterms 30% iv.
Final Exams 35%
No prescribed textbook but questions may be sourced from either of the books of de Leon
or Aquino - outline is basis for discussion flow.
Seat plan Class President is requested to provide me a seat plan with passport photos of
students.
Dress Code observe College rules.
Waiting time for Professor before Class may leave up to one (1) hour.

INTRODUCTION
A.
History
1.
U.S. Uniform Negotiable Instruments Act
2.
U.S. Uniform Commercial Code
3.
Code of Commerce Book II, Articles 443 to 556
B.
Governing Law Act No. 2031, Negotiable Instruments Law (NIL or Act,
hereinafter);
1.
Sec.1 197, NIL Repealing Clause
2.
Sec. 196, NIL Cases not provided for in the Act
3.
Article 18, Civil Code
- Rivera vs. Spouses Chua; G.R. No. 184458, January 14, 2015
- State Investment House, Inc. vs. Court of Appeals, 217 SCRA 32 [1993]
- Government Service Insurance System vs. CA and Mr. and Mrs. Isabelo R.
Racho, 170 SCRA 533 [1989]
- Metropolitan Bank & Trust Company vs. CA, et al., 194 SCRA 169 [1991]
C.
Functions and Significance of Negotiable Instruments
1.
Money Substitute Lozano vs. Martinez, 146 SCRA 323
2.
Medium of Exchange in Business Transactions
3.
Medium of Credit in Business Transactions
Lim vs. Mindanao Wines & Liquor Galleria, 678 SCRA 628 [2012]

References to Sections or Section in this outline shall mean the relevant Sections of the NIL,
unless otherwise stated.

II.

Gaw vs, Chua; 551 SCRA 505 [2008]

D.
Features of Negotiable Instruments
1.
Negotiability Traders Royal Bank vs. CA, et al., 269 SCRA 15 [1997]
2.
Secondary Contracts Accumulation State Investment House, supra.
E.
Forms/Kinds of Negotiable Instruments
1.
Sec. 126 bill of exchange HSBC, Philippine Branches vs. Comm. Of
Internal Revenue, 724 SCRA 499
2.
Sec. 184 promissory note; Sec. 130
3.
Differences between Bill of Exchange and Promissory Note
4.
Others
a.
Sec. 185 checks Citibank, N.A. vs. Sabeniano, 504 SCRA 378
[2006]
b.
Certificate of Deposit Far East Bank & Trust Company vs.
Queremit, G.R. No. 148582, January 16, 2002.
c.
Bonds, debentures, notes Sec. 3, Republic Act No. 8799,
Securities Regulation Code (SRC); Rule 12.1-6
5.
Limited Negotiability Instruments
a.
Document of Title
b.
Letter of Credit Code of Commerce, Art. 568
c.
Trust Receipts Trust Receipts Law P.D. No. 115.
d.
Certificate of Stock Corporation Code, B.P. No. 68
6.
Phases in a Negotiable Instruments Effectivity See Aquino, Notes and
Cases on Banking Law and the Negotiable Instruments Law, Vol. 1, p. 22,
[2014 edition]
GENERAL DISCUSSION ON NEGOTIABLE INSTRUMENTS
A.
Form and Interpretation
1.
Sec. 1 requisites for negotiability; non-negotiability
- Caltex (Philippines), Inc. vs. CA, 212 SCRA 448 [1992]
- Philippine Bank vs. Aruego, 102 SCRA 530 [1981]
- Banco de Oro Savings & Mortgage Bank vs. Equitable Banking
Corporation, et al., 157 SCRA 188 [1988]
- Garcia vs. Llamas, 417 SCRA 292 [2003]
a. Written and signed by maker or drawer Sec. 191
b. Contain Unconditional promise or order to pay a sum certain in money
Secs. 3 (Unconditional Promise)
- Sec. 10 (Terms, when sufficient);
- Art. 1173, 1181, New Civil Code;
- Sec. 2 (Certainty as to sum)
- Pacifica Jimenez vs. Bucoy, 103 Phil. 40 [1958]
Allowable conditions presentment
Sec. 70 (presentment for payment),
- Sec. 143 (presentment for acceptance);
- Secs. 152 (protest necessary), 165 (agreement of acceptor for
honor), 167 (protest of bill accepted for honor), 170 (dishonor of
bill by acceptor for honor);
- Sec. 89 (to whom notice of dishonor is given).
c. Payable on Demand or at a fixed or determinable future time
Secs. 7 (payable on demand) and Sec. 4 (determinable future time);
- Art. 1193; Sec. 5 (Additional provisions not affecting negotiability).
d. Payable to Order or to Bearer words of negotiability;
- Sec. 8 (payable to order); Sec. 9 (payable to bearer);
Fictitious Payee Rule;
Bearer defined Sec. 191, par. 4
- People vs. Wagas, 705 SCRA 17 [2013]
- Salas vs. CA, et al., 181 SCRA 296 [1990]
- Philippine National Bank vs. Rodriguez, et al., 566 SCRA 513
[2008]
2

2.

Consolidated Plywood Industries, Inc. vs. IFC Leasing &

Acceptance Corp. 149, SCRA 448 [1987]
e. Named drawee.
- Sec. 6 Omissions Not affecting negotiability;
- Sec. 13 (date insertion)
- Sec. 11 (presumption as to date);
- Ponce de Leon v. Rehabilitation Finance, 36 SCRA 289
- Buencamino v. Hernandez, 8 SCRA 483
- Art. 2244[4], Civil Code
- Sec. 12 (ante-dated/post-dated)
- Pacheco v. CA, 319 SCRA 595
- People vs. Tiongco, 290 SCRA 595

3.

4.
5.
6.
7.
8.
9.
10.
B.

- Sec. 14 (filling in blanks)

- Gonzales vs. Pe, 655 SCRA 181, [2011]
- Borromeo v. Sun, 317 SCRA 176
Sec. 15 Incomplete Instruments
- Development Bank of Rizal v. Wei, 219 SCRA 736
Sec. 17 (Construction of ambiguous instruments)
- Philippine National Bank vs. Concepcion Mining Co.,
5 SCRA 705 [1962]
- Republic Planters Bank vs. CA, 216 SCRA 738 [1992]
- Astro Electronics Corp. vs. Philippine Export and Foreign Loan
Guarantee Corp. 411 SCRA 462 [2003]
- State Investment House, Inc. vs. CA, supra.
- Equitable Banking Corp. vs. Hon. CA, 161 SCRA 518 [1988]
Sec. 18 (Liability Using Trade or Assumed Name)
Sec. 19 (signature by agent)
Sec. 20 (liability of an agent)
Sec. 21 (signature by procuration;
Sec. 22 (Indorsement by infant or corporation)
Sec. 23 (Forged Signature)
Sec. 24 (Presumption of Consideration)
- Cayanan vs. North Star International Travel, Inc. 658 SCRA 644
[2011]

Parties
1.
Parties (Sec. 191 in relation to Sec. 126 and 184)
Holder
Maker/Drawer
Payee
Drawee/Acceptor
Bearer
Indorser
Indorsee
- Villanueva v. Nite, 496 SCRA 459
- Hi-Cement Corp. v. Insular Bank of Asia, 534 SCRA 269
2.
Requisites of Contract and Capacity to Contract
Articles 1318 and 1327, Civil Code
Article 1381, Civil Code (Rescissible Contracts)
Article 1390, Civil Code (Voidable Contracts)
Article 1403, Civil Code (Unenforceable Contracts)
Article 1409, Civil Code (Void Contracts)
3.
Exceptions with Respect to Negotiable Instruments
Incapacity (Sec. 22, NIL)
Illegality (Secs. 38 and 39, NIL)
Forgery (Secs. 18 and 23, NIL)
3

III.

IV.

Duress (Sec. 55, NIL; Article 1335, Civil Code)

4.
Liabilities (Sec. 192, NIL)
Primarily Liable (Maker and Acceptor)
Secondarily Liable (Drawer and Indorser)
5.
Indorser vs. Guarantor/Surety
Allied Banking Corp. v. Court of Appeals, 494 SCRA 467
CONSIDERATION AND EFFECTS
A.
Presumption
- Sec. 24, NIL
- Travel-On Inc. v. CA, 210 SCRA 351
- Idos v. CA, 296 SCRA 19
B.
Value
Sec. 25, NIL
- Rodriguez v. CA, 207 SCRA
- Pineda vs. dela Rama, 121 SCRA 671
C.
Holder for Value
Sec. 26, NIL
- Bataan Cigar v. CA, 230 SCRA 643
D.
Lien Holder; Holder for value
Sec. 27, NIL
- Caltex (Phils.) v. CA, 212 SCRA 448
E.
Effect of Want of Consideration
Sec. 28, NIL
F.
Accommodation Party
Sec. 29, NIL
- Spouses Sierra v. PAIC Savings and Mortgage, Inc., 734 SCRA 694
[2014]
- Aglibot v. Santia, G.R. No. 185945, December 5, 2012
- Gonzales v. PCIB, 644 SCRA 180 {2011}
- Jose v. CA, 177 SCRA 594
- Ang v. Associated Bank, 532 SCRA 244
TRANSFER AND NEGOTIATION
A.
Issuance and Delivery
Sec. 16, 191 NIL
- Rizal Commercial Banking Corporation v. Hi-Tri Development
Corporation, G.R. No. 192413, June 13, 2012
In Re: Marten's Estate
De la Victoria v. Burgos, 245 SCRA 374
Lim v. CA, 251 SCRA 408
B.
Negotiation; Holder
Secs. 30, 191, NIL
- State Investment House v. CA, 217 SCRA 32
- Bank of Philippine Islands v. Court of Appeals, 512 SCRA 620
C.
Methods of negotiation
- Allied Banking Corp. v. CA, 494 SCRA 467
D.
Indorsement
By signature on instrument or on allonge
- Sec. 31, NIL
In case of joint or alternative payees or indorsers
Where name is misspelled
E.
Indorsement must be entire instrument
Severally:
Jointly and severally
- Sec. 32, NIL
- Montinola v. PNB, 88 Phil. 178
F.
Kinds of Indorsements
4

V.

Special & blank indorsements; payable to bearer, qualified and restrictive

- Secs. 34, 40, 35, NIL
G.
Qualified Indorsement
Metropol Bacolod Financing & Investment Corp. v. Sarmak, 120 SCRA
864
Great Asian Sales Center Corp. v. CA, 381 SCRA 557
H.
Conditional Indorsement
Sec. 39, NIL
I.
Indorsement to or by collecting bank
Metropolitan Bank & Trust Co. v. Phil. Bank of Communications, 536
SCRA 556
J.
Unindorsed instruments
Sec. 49, NIL
Metropolitan Bank and Trust Company v. Chiok, G.R. No. 175302,
November 26, 2014
K.
Cancellation of indorsements
Sec. 48, NIL
L.
Indorsement by agent
Sec. 44, 20 NIL
- Francisco v. CA, 319 SCRA 054
M.
Presumption as to indorsements
Secs. 45 (time), 46 (place) , 42 (payee)
N.
Continuation of negotiable character
Sec. 47, NIL
HOLDER IN DUE COURSE
A.
Holder; Holder for Value and Holder and in due Course
- Secs. 26, 52, 53 and 191 NIL
- Patrimonio v. Gutierrez, 724 SCRA 636, June 4, 2014
- Prudencio v. CA, 143 SCRA 11
- BPI v. Roxas, 536 SCRA 168
B.
Holder For value
Secs. 24, 25, 26 and 27, NIL
Caltex (Phils.) v. CA, 212 SCRA 448
C.
In Good Faith
Secs. 55, 56 NIL
Article 1338, 1344 Civil Code
Gonzales v. RCBC, 508 SCRA 459
1.
Crossing a check; bad faith
Hi-Cement Corp. v. Insular Bank of Asia, 534 SCRA 269
Metropolitan Bank & Trust Co.v. Philippine Bank of
Communications, 536 SCRA 556
2.
Financing company; holder in good faith
Salas vs. CA, 181 SCRA 296
Great Asian Sales Center Corp. v. CA, 381 SCRA 557
Sec. 146, RA No. 7394 (Consumer Act of the Phils.)
3.
Postdating a check
Sec. 12, NIL
People of the Philippines v. Gilbert Reyes Wagas, G.R. No.
157943, September 4, 2013
State Investment House v. CA, 217 SCRA 32
4.
Suspicious circumstances
Vicente de Ocampo & Co. v. Gatchalian, 3 SCRA 596
5.
Effect of purchase at a discount
6.
Effect of notice before full payment
Sec. 54, NIL
7.
Constructive notice not sufficient
5

8.

VI:

Notice of accommodation not notice of defect

Sec. 29
D.
Complete & Regular; material alteration
Secs. 124, 125, NIL
Leonardo Bognot v. RRI Lending Corporation, G.R. No.
180144, September 24, 2014
- International Corporate Bank v. CA, 501 SCRA 20
E.
Holder at or after maturity & without notice of dishonor
Sec. 53, NIL
F.
Rights of a Holder in Due Course
Secs. 57, 58, NIL
1.
Personal defenses
2.
Real defenses
State Investment House v. CA, 217 SCRA 32
Yang v. CA, 409 SCRA 159
G.
Effect of qualified conditional and restrictive indorsements
H.
Payee as holder in due course
Howard National Bank v. Wilson
I.
Rights of a purchaser from a holder in due course
Sec. 58, NIL
Gonzales v. Rizal Commercial Banking Corp., 508 SCRA 459
J.
Presumption in favor of due course holding
Sec. 59, NIL
BPI v. CA, 232 SCRA 302
K.
Transfer of unindorsed instrument
Sec. 49, NIL
Commercial Bank of Lafayette & Trust Co. vs. Barry
DEFENSES AND EQUITIES
A.
Defenses and Equities in general
- Secs. 57, 58, 55, NIL
B.
Incapacity
- Sec. 22, NIL
Murray vs. Thompson
- Sec. 45, Corporation Code
C.
Illegality
Articles 38, 39 (i); Civil Code
- Rodriguez vs. Martinez
- Pineda v. de la Rama, 121 SCRA 671
D.
Forgery
Secs. 23, 18, NIL
Associated Bank v. CA, 252 SCRA 620
Republic v. Edrada, 65 SCRA 680
E.
Acceptance and payment under mistake
Effects of Acceptance
Far East Bank & Trust Co. v. Gold Palace Jewellery, 562 SCRA 604
When drawee accepts and pays for forged instrument
Sec. 62, NIL
Price vs. Neal
PNB vs. CA, 25 SCRA 693
Extensions of Price vs. Neal doctrine
- Over draft
First National Bank of Portland vs. Noble
Liberty Trust vs. Haggerly
- Stop payment order
Effect of negligence of depositor
PNB v. Quimpo, 158 SCRA 582
6

VII.

Gempesaw v. CA, 218 SCRA 682

Effect of payment under forged indorsements
Manila Lighter Trans. v. CA, 182 SCRA 251
Samsung Construction v. Far East Bank, 436 SCRA 402
Effect of negligence of drawee in informing recipient of forgery
Clearfield Trust Co. v. US
Estoppel
MWSS v. CA, 143 SCRA 20
F.
Material alteration
1.
In general
Sec. 124, 125, NIL
Banco Atlantico v. Auditor General, 81 SCRA 335
Metropolitan Bank & Trust Co. v. Cabilzo, 510 SCRA 259
2.
Effect of negligence of drawer of checks
Foutch v. Alexandria Bank & Trust Co.
3.
Effect of drawees payment of acceptance of altered check
Marine National Bank v. National City Bank
4.
Payment under materially altered instrument
Metropolitan Bank & Trust Co. v. Cabilzo, 510 SCRA 259
G.
Fraud
C.I.T. Corp. v. City of Taunton
H.
Duress
I.
Complete instrument which is undelivered
Sec. 16, NIL
People v. Yabut, 76 SCRA
Lim v. CA, 251 SCRA 408
J.
Incomplete instrument which delivered
Sec. 15, NIL
Linick v. A.J. Nutting Co.
K.
Incomplete instrument which has been delivered
Sec. 14, NIL
Borromeo v. Sun, 317 SCRA 176
Pacheco v. CA, 319 SCRA 595
L.
Consideration
Sec. 28, NIL
Dougherty v. Salt
M. Signature under Trade Name or Agency
Secs. 18, 19 and 20, NIL
Francisco v. CA, 319 SCRA 354
Philippine Bank of Communicationsv. Aruego, 102 SCRA 530
LIABILITY OF PARTIES
A.
Liability of primary parties
1.
In general
Sec. 192, NIL
Far East Bank & Trust Co. v. Gold Palace Jewelry, 562 SCRA 604
2.
Want of demand; presentment
Sec. 70, NIL
Rivera v. Spouses Chua, G.R. Nos. 184458 & 184472, January 14, 2015
Clark v. Sellner, 42 Phil. 385
3.
Status of drawee prior to acceptance or payment; effect of stop order
Sec. 127, 189, NIL
- Republic v. FNCB, 35 SCRA 851
Phil. Bank of Commerce v. CA, 269 SCRA 695
4.
Liability of acceptor
Sec. 62, NIL
-Far East Bank & Trust Co. v. Gold Palace Jewellery, 562 SCRA 604
B.
Formal requisites of acceptance
7

Sec. 191, 132, 133, 138, NIL

Philacor Credit Corporation, vs.Commissioner of Internal
Revenue, G.R. No. 169899, February 06, 2013
Constructive acceptance
Secs. 136, 137, 150
- Wisner vs. First National Bank of Gallitzin
C.
Acceptance on a separate instrument
Secs. 134, 135
Coolidge vs. Payson
D.
Kinds of Acceptance
1.
General acceptance
Secs 141, 142, NIL
2.
Qualified acceptance
Sec. 141, 142 NIL
3.
Trade acceptance
4.
Bankers acceptance
E.
Checks
Secs 185, 63
- Areza v. Express Savings Bank, Inc.734 SCRA 588, [2014]
PAL v. CA, 181 SCRA 557
International Corporate Bank v. Gueco, 351 SCRA 516
1.
Certification and its effects
Secs. 187, 188 and 189
Roman Catholic Archbishop of Malolos Inc v. IAC
2.
Distinction between surrender of check upon payment and negotiation
3.
Clearing of checks
F.
Liability of secondary parties
Sec. 70
1.
Liability of drawer; stop payment
Sec. 61
PNB vs. Picornell, 46 Phil. 716
2.
Criminal liability for bouncing checks
a) under B.P. No. 22,
- Moster v. People, 546 SCRA 287
b) estafa under the Revised Penal Code
- Lazaro v. Martinez, 146 SCRA 323
Dy v. People, 571 SCRA 59
3.
Liability of qualified indorsement and one negotiating by delivery
Sec. 65
4.
Liability of a general or unqualified indorser
Secs. 66, 67, 63, 40, NIL
Allied Banking Corp. v. Lim Sio Wan, 549 SCRA 504
5.
Liability of restrictive indorsers
6.
Order of liability among indorsers
Sec. 68, NIL
G.
Liability of accommodation party
- Secs. 29, 63, 64
Ingalls vs. Marston
Prudencio vs. CA, 143 SCRA 7
PRESENTMENT
I.
Presentment for acceptance
1.
When necessary effect of non-presentmen
Secs. 143, 144, 193, NIL
2.
How and when made
Secs. 145, 146, NIL
8

3.

J.

K.

When excused
Secs. 148, 147, NIL
4.
Dishonor and its effects
Secs. 149, 150, 151, 89, 117, NIL
Presentment of payment
1.
When presentment necessary; effect of non-presentment
Secs. 143, 144, 193, NIL
2.
When presentment not necessary
a) As to drawer
Sec. 79, NIL
b) As to indorser
Sec. 80, NIL
c) As to all secondary parties
Sec. 82, 151, 111, NIL
3.
Date and time of presentment of instrument bearing fixed maturity
Sec.s 71, 85, 86, 124, NIL
Ting Ting Pua vs. Sps. Benito Lo Bun Tiong and Caroline Siok
Ching Teng, G.R. No. 198660, October 23, 2013
Far East Realty Investment Inc. v. CA, 166 SCRA 256
4.
Date of presentment of demand notes
Sec. 7, NIL
Buencamino v. Hernandez, 85 SCRA 483
5.
Date of presentment of demand bills of exchange
Columbian Banking vs. Boween
6.
Date of presentment of checks
Secs. 185, 186, NIL
City of Naga v. Agna, 715 SCRA 176
Wong v. CA, 351 SCRA 100
7.
When delay in presentment excused
Sec. 81, NIL
8.
Manner of presentment
Sec. 74, NIL
9.
What constitute sufficient presentment
Sec. 72, NIL
a.
By whom
Crossed checks
Equitable Banking Corporation v. Special Steel Products,
Inc., G.R. No. 175350, June 13, 2012
PCIB v. Balmaceda, 658 SCRA 33[2011]
b.
Time of presentment
Secs. 72(b), 75
c.
Place of presentment
Sec. 73, NIL
d.
To whom presentment must be made
Secs 72(d), 76, 77, 78, NIL
10.
What constitutes dishonor by non-payment
Sec. 83, NIL
11.
Effect of dishonor by non-payment
Sec. 84, NIL
Notice of dishonor
1.
When necessary
Sec. 89
2.
Form and contents must be given
Secs. 95, 96, NIL
3.
Time within which notice must be given
Secs. 102, 103, 104, 105, 106, 107, 113
Arterburn vs. Wakefield
9

4.
5.
6.

7.
8.

9.
PROTEST
L.

M.

Place where notice must be given

Sec. 108
By whom notice may be given
Sec. 90, 91, NIL
To whom notice must be given
a.
if given by agent
Sec. 94, NIL
b.
To whom in general
Sec. 97, NIL
c.
if party is dead
Sec. 98, NIL
d.
to partners
Sec. 99, NIL
e.
to joint partners
Sec. 100, NIL
f.
to bankrupt
Sec. 101, NIL
In whose favor notice operates
Sec. 92, 9.
When rule requiring notice not applied
a.
In general
Sec. 112
b.
when notice of non-acceptance already given
Sec. 116
c.
Waiver
Secs. 109, 110
Peoples National Bank of Ypsiolanti vs. Dicks
d.
When not necessary to charge drawer
Sec. 114
State Investment House vs. CA, supra
e.
When not necessary to charge indorser
Sec. 115
Legal effect of failure to give notice
Secs. 89, 117

Protest
1.
Definition and method
Velasquez v. Solidbank, Corp., 550 SCRA 119
2.
When necessary
Secs. 152, 129, 157
3.
Forms and contents of certificate of protest
Sec. 153
a. Purpose of the certificate of protest
b. By whom made
Sec. 154
4.
Time and place of protest
Sec.s 155, 156
5.
Protest for better security
Sec. 158, NIL
6.
When delay is excused and protest
Secs. 159, 112, NIL
Ellenbogen vs. State Bank
7.
Waiver of protest
Sec. 111, NIL
8.
Protest in case of loss of instrument
Sec. 160
Acceptance for honor
10

Secs. 161, 131, NIL

N.
Payment for honor
Sec. 171, NIL
O.
Liability of party on indorsement after maturity
Sec. 7, NIL
Bishop vs. Dexter
P.
Instruments payable at a bank
Sec. 87, NIL
Binghampton Pharmacy vs. First National Bank
Q.
Bills in set
Secs. 178, 179, 180, 181, 182, 183, NIL
R.
Liability of transferors or assignors or negotiable instruments
Art. 1628 CC
VIII. DISCHARGE
PRIMARILY LIABLE
A.
Discharge of the instrument; generally
Sec. 119, NIL
B.
By payment in due course
Secs. 51, 88
1.
Medium of payment
PNB v, CA, 181 SCRA 557
2.
By whom made
Fox vs. Kroeger
3.
When check deemed paid by drawee bank
Philippine National Bank v. Spouses Cheah Chee Chong and
Ofelia Camacho Cheah, G.R. No. 170865, April 25, 2012
4.
To whom made
Equitable Banking vs. CA
In Re Harbaughs Estate
5.
At or after maturity
6.
In good faith and without notice
C.
By intentional cancellation
Secs. 119(c), 123, NIL
- Jones Admrs vs. Coleman
D.
By any other act which will discharge a contract
Manchester v. Parsons
E.
By reacquisition of principal debtor in his own right
Sec. 119(e), NIL
F.
By renunciation of holder
Sec. 122, NIL
McGlynn vs. Granstrom
SECONDARILY LIABLE
A.
In General
Sec. 120, NIL
B.
Tender of payment
Legaspi v. CA, 142 SCRA 82
C.
Renunciation by holder
Sec. 122, NIL
D.
Cancellation; unintentional
Sec. 123, NIL
E.
Alteration
Sec. 124, 125, NIL
EXTINGUISHMENT OF OBLIGATIONS
Article 1231, Civil Code
Payment or performance
Loss of the thing due
Condonation or remission of the debt
11

Confusion or merger of rights

Compensation
Novation
Annulment
Rescission
Fulfilment of a resolutory condition
Prescription
Nothing follows

12