Sec. 15. Incomplete instrument not delivered.

- Where an incomplete instrument has not been delivered, it will not, if completed and negotiated without authority, be a valid contract in the hands of any holder, as against any person whose signature was placed thereon before delivery.

APPLICATION OF PROVISION Section applies to an incomplete and undelivered instrument

INSTRUMENT NOT VALID AGAINST PARTY BEFORE DELIVERY Situation: A signs a blank check, which was subsequently stolen by B and fills up the amount and a fictitious name as payee. He then indorses the same to C, C to D, D to E, and E to F. Can F enforce the instrument against A? The answer is NO, because against A, whose signature was placed on the check prior to delivery, the instrument is not valid. The answer would still be the same in case F was a holder in due course. Why? The law doesnt discriminate on what kind of holder. However, the invalidity of the instrument is only with reference to parties whose signature appears in the same prior to delivery. As to parties whose signature appears after delivery, it may be valid.

IT IS A REAL DEFENSE The possible defense of a party whose signature appears on an instrument prior to delivery is that, as against him, the instrument is not valid for having been incomplete and undelivered Want of delivery of a mechanically incomplete instrument defense that cannot only be interposed against one who is not a holder in due course but also a holder in due course DELIVERY IS NOT CONCLUSIVELY PRESUMED WHERE INSTRUMENT IS INCOMPLETE

Section 15 and 16 read together

BUT DELIVERY PRESUMED PRIMA FACIE But where an incomplete and undelivered instrument is in the hands of a holder in due course, there is prima facie presumption of delivery which the maker may rebut by proof of non-delivery Where the custo dy of an incomplete instrument has been entrusted to another, who wrongfully completes and negotiates it to a holder in due course, delivery to an agent or custodian is a sufficient delivery to bind the drawer or maker.

What is the effect of possession of a negotiable instrument after presentment and dishonor? It does not make the possessor a holder for value within the meaning of the law. It gives rise to no liability on the part of the maker or drawer or indorsers. (STELCO Marketing Corp. vs. CA, G.R. No. 96160, June 17, 1992) Sec. 23. Forged signature; effect of. - When a signature is forged or made without the authority of the person whose signature it purports to be, it is wholly inoperative, and no right to retain the instrument, or to give a discharge therefor, or to enforce payment thereof against any party thereto, can be acquired through or under such signature, unless the party against whom it is sought to enforce such right is precluded from setting up the forgery or want of authority. FORGERY, DEFINED AND EXPLAINED Counterfeit making or fraudulent alteration of any writing, and may consist in the signing of anothers name, or the alteration of an instrument, in the name, amount, description of the person and the like, with the intent to defraud Section 23 only applies to forged signatures or signatures made without the authority of the person whose signature purports it to be FRAUD AMOUNTING TO FORGERY Fraud in factum or fraud in esse contractus There is no intention to issue an instrument

FRAUDULENT IMPERSONATION Suppose X represents himself as Juan Cruz when he is not to Y. Due to such misrepresentation, he obtained from Y a note payable to the order of Juan Cruz. If Y intends that the proceeds of the note will go to the real Juan Cruz and not X, but to whom Y issued the note on the belief that X was Juan Cruz, would be a forgery. DOUBLE INTENT IN FRAUDULENT IMPERSONATION 1. He intends to make the instrument payable to the person before him or to the person writing at the other end of the line, in case the negotiation is by correspondence 2. He intends to make the instrument payable to the person whom he believes the stranger to be GENERAL RULE IN FRAUDULENT IMPERSONATION The first one is the controlling intent except where the name of the payee was already known to the maker or drawer or was particularly identified in some manner REASON FOR RULE: THEORY OF ACTUAL INTENT Throws the loss on the drawer In the absence of anything to show that the drawer had any doubt as to the identity of the person to whom he delivered the paper as payeethe drawee, in paying the paper, or the holder, in taking it upon the indorsement of the impostor in the name of which the payee was described, carries out the intention that the drawer entertained at the time of delivery of the paper to the impostor, although that intention was conceived in consequence of the fraud of the impostor as to his identity and ownership of the property which represented the consideration ANOTHER REASON FOR THE RULE: THEORY OF ESTOPPEL As between two innocent persons, the one whose act was the cause of the loss should bear the consequences It was the drawers duty to use diligence to ascertain the identity of the party with whom he has dealt. Failing to make this discovery, he became the victim of the fraud. The impostor having succeeded in this first and essential step in the practice of the fraud, the next was comparatively an easy one.

RULE IS QUALIFIED WHERE IMPOSTOR REPRESENTS HIMSELF AS AGENT OF PAYEE There is a distinction between cases where the paper is delivered to the impostor as payee, in the belief that he is the person to whom the instrument it would be paid, and cases where the paper is delivered to the impostor upon his representation, in the belief that he is agent of the person named as payee The loss falls on the drawee or purchaser, as the case may be, rather than on the drawer where the impostor upon whose indorsement the paper was purchased or paid, represented himself to be the agent of the payee and not the payee himself ADMISSION OF GENUINENESS AND DUE EXECUTION When an action or defense is founded upon a written instrument such as a negotiable instrument, copied in or attached to the corresponding pleading, the genuineness and due execution of the instrument shall be deemed admitted unless specifically denied under oath by the adverse party Consequently, the genuineness and due execution of the written instrument or document copied in or attached to the opponents pleading as the basis of his claim or defense, should be denied specifically under oath, otherwise they are deemed admitted. MEANING OF ADMISSION OF GENUINENESS AND DUE EXECUTION 1. That he signed it or that it was signed by another for him and with his authority 2. That at the time it was signed, it was in words and figures exactly as set out in the pleading of the party relying upon it, 3. That any formal requisites required by law, such as swearing and acknowledgment, or revenue stamp which it requires, are waived by him DEFENSES CUT OFF BY ADMISSION OF GENUINENESS, ETC. 1. The defense that the signature is a forgery

2. That it was unauthorized, as in the case of an agent signing for his principal, or one signing on behalf of a partnership or corporation or that in case of the latter, that the corporation was not authorized under its charter to sign the instrument 3. That the party charged signed the instrument in some other capacity than that

alleged in the pleading setting it out FAILURE TO IDENTIFY PROMISSORY NOTE WILL NOT NECESSARILY DEFEAT CLAIM EFFECT OF FORGERY IN GENERAL 1. That the signature forged or made without authority is wholly inoperative 2. That no right to retain the instrument, or to give discharge thereof, or to enforce payment thereof against any party thereto, can be acquired through or under such a signature forged or made without authority 3. That nevertheless, as against a party precluded from setting up the forgery or want of authority, the signature forged or made without authority is operative, and rights to retain the instrument, to give discharge therefore, or to enforce payment thereof, can be acquired through or under the signature forged or made without authority EXTENT OF THE EFFECT OF THE FORGERY 1. Only the signature forged or made without authority is stated by the law to be inoperative but neither the instrument itself is, nor the genuine signatures are, rendered inoperative 2. The instrument can be enforced by holders to whose title over the instrument the forged signature is not necessary, such as, the indorsement of an instrument which on its face is payable to bearer 3. The instrument can be enforced against those who are precluded from setting up the defense of forgery, even against those whose signatures have been forged PERSONS PRECLUDED FROM SETTING UP DEFENSE OF FORGERY 1. Those who warrant or admit to the genuineness of the signature in question indorsers, persons negotiating by delivery, and acceptors 2. Those who, by their acts, silence or negligence, are estopped from setting up the defense of forgery INDORSERS AS WARRANTORS

 Whether general or qualified Warrant that the instrument indorsed by them is genuine in all respects what it purports it to be PERSONS NEGOTIATING BY DELIVERY AS WARRANTORS Persons negotiating by mere delivery also warrant that the instrument negotiated by them is genuine and in all respects what it purports to be They are consequently precluded from setting up the defense of forgery ACCEPTORS AS WARRANTORS A drawee, by accepting the bill, admits the genuineness off the signature of the drawer PRECLUDED Includes those cases where they are estoppels against the party desiring to set up the forgery ESTOPPEL AS TO FORGERY OF INSTRUMENTS Whenever a party has, by his own declaration, act, or omission, intentionally and deliberately led another to believe that his or anothers signature in an instrument is genuine, and to act upon such belief, he cannot, in any litigation arising out of such declaration, act, or omission, be permitted to set up the forgery of such signature/s Estoppel may arise from a declaration, act or omission/negligence UNREASONABLE DELAY Unreasonable delay, after his discovery of the forgery, on the part of one having the opportunity and duty to speak, in disclosing the forgery upon commercial paper to the one who ought to be apprised thereof, estops the former from thereafter asserting the forgery as against the latter where the latter is prejudiced by such delay or failure Requisites: o That the delay be unreasonable o That the one who ought to be apprised of the forgery has been prejudiced REASONABLY PROMPT NOTICE

 Depends upon the circumstances of the case, and the situation of the parties with reference to the remedies against any party is a proper element to enter into the estimate of the reasonableness of the notice WHEN PREJUDICED AND WHEN NOT PREJUDICED A bank is prejudicedat the time one discovered that his attorney forged his indorsement to a draft in his favor, it had assets of the attorney in its possession to protect itself but at the time it was notified of the forgery, it has parted with such assets It is not prejudiced by the delay where at no time after the discovery of the forgery did the cashier have any property with which to indemnify the bank ESTOPPEL BY NEGLIGENCE IN DELIVERY A drawer may be precluded from defense of forgery of the payees indorsement if delivery by him to the payee is negligent CASES OF FORGERY IN GENERAL 1. Forgery of promissory notes which may be further subdivided intoforgery of indorsement in the note; forgery of the makers signature 2. Forgery of bills of exchange which may be further classified intoforgery of an indorsement on the bill; forgery of the drawers signature, either with acceptance by the drawee, or without such acceptance but the bill is paid by the drawee RIGHTS OF PARTIES IN FORGERY OF INDORSEMENT IN NOT PAYABLE TO ORDER Where the indorsement is forged and the note is payable to order, the party whose indorsement is forged and parties prior to him including the maker cannot be held liable by the holder, whether that holder is a holder in due course or not: 1. The reason is that, inasmuch as the indorsement is forged, it is inoperative. But since the note is payable to order, it can be negotiated only by indorsement completed by delivery, and therefore, the forged instrument is the only means one could acquire any rights to it or its proceeds 2. The law further provides that no right to retain the note, give discharge thereof, or enforce payment thereof, could be acquired through and under the

forged signature. Hence the holder didnt acquire at least those rights as against the party whose signature is forged and parties prior to him, including the maker 3. The forger usually obtains possession of the note by fraudulent or other unlawful means and therefore, he has no right whatsoever in the note RIGHTS OF PARTIES IN FORGERY OF INDORSEMENT IN A NOTE PAYABLE TO BEARER May be held liable by a holder in due course but not by the one who is not a holder in due course Provided that the note was mechanically complete before the forgery Forged instrument is not necessary to the title of a holder since instruments payable by bearer can be negotiated by mere delivery RIGHTS OF PARTIES IN FORGERY OF MAKERS SIGNATURE Where the makers signature is forged, he cannot be held liable by any holder, whether the holder is in due course or not Purported maker is not a party to the instrument as his forged signature is inoperative and no right to retain, enforce, or discharge the note, may be acquired against him DRAWEE CANNOT CHARGE ACCOUNT OF DRAWER In an action by the drawee against the drawer for the amount charged by the drawee against the account of the drawer where the drawee paid a check on a forged indorsement, the drawee has no defense against the drawer and the drawer may recover from the drawee for an instrument paid on a forged indorsement Depository owes to the depositor an absolute and contractual duty to pay the check only to the person to whom it is made payable or upon his genuine indorsement DRAWER CANNOT RECOVER FROM THE COLLECTING BANK Drawer has no right to recover the amount paid from the collecting bank as the duty of the collecting to exercise care in collection is due only to the payee, and as the drawer suffers no loss since it can recover the amount paid from the drawee bank which has no right to charge the drawers account DRAWEE CAN RECOVER FROM COLLECTING BANK

 The drawee may recover from the recipient of payment, such as the collecting bank, under a forged indorsement Rule allowing the payee to recover from the recipient of the payment under a forged indorsement PAYEE CAN RECOVER FROM RECEIPT OF PAYMENT According to the general rule, a bank or other corporation or an individual, who has obtained possession of a check, upon an unauthorized or forged indorsement of the payees signature and who collects the amount of the check from the drawee, is liable for the proceeds thereof to the payee or other owner, notwithstanding that they have been paid to the person whom the check was obtained The possession of the check on the forged indorsement is wrongful and when the money had been collected on the check, the bank or other person or corporation, can be held as far as moneys had and received and the proceeds are held for the rightful owners of the payment and may be recovered by them COLLECTING BANK BOUND TO SCRUTINIZE CHECKS DEPOSITED WITH IT TO DETERMINE GENUINENESS AND REGULARITY CONVERSION An unauthorized assumption and exercise of the right of ownership over goods or personal chattels belonging to another, to the alteration of their condition or exclusion of the owners right AS AFFECTED BY QUESTION OF DELIVERY TO PAYEE The checks didnt reach the hands of the payee. The bearing of such absence of delivery is considered in some cases and held not to be material Where there is no delivery to the payee and no title vests upon him, he ought not to be allowed to recover on the ground that he lost nothing because he never became owner of the check and still retained his claim against the drawer PAYEE CANNOT RECOVER FROM THE DRAWEE An action cannot be maintained by a payee of a check against the bank on which it is drawn unless the check has been certified or accepted by the bank on which it is drawn, without acceptance or certification, as provided by the statute,

there is no privity of contract between the drawee bank and the payee, or holder of the check RIGHTS OF PARTIES IN FORGERY OF INDORSEMENT IN BILL PAYABLE TO BEARER Holder may recover if he is a holder in due course

RIGHTS OF PARTIES IN FORGERY OF DRAWERS SIGNATURE WHERE DRAWEE HASNT ACCEPTED BILL BUT PAID IT In the case of the payment of a forged check even without former acceptance, the drawee cannot recover from a holder in due course not chargeable with any act or negligence or disregard of duty As between equally innocent parties, the drawee who pays money on a check the signature to which is forged, cannot recover the money from the one who received it BUT PAYMENT NOT EQUIVALENT TO ACCEPTANCE OR CERTIFICATION The payment of a forged check doesnt include or imply its acceptance in the sense that this word is used in Section 62 of NIL Basis of the general rule is not that the drawee is precluded from setting up forgery because, by paying the check, it has accepted the check and therefore admitted the genuineness of the drawers signature By paying the check the drawer is presumed negligent or deemed constructively negligent NEGLIGENCE IN FORGERY OF INDORSEMENTS IN BILL It presupposes that the drawer himself wasnt negligent or guilty of such conduct as would estop him from asserting the forged character of the indorsement as against the depository and that if he was negligent or guilty of such conduct, the loss must fall on him WHERE A DEPOSITOR IS USING ITS OWN PERSONALIZED CHECKS, ITS FAILURE TO PROVIDE ADEQUATE SECURITY MEASURES TO PREVENT FORGERIES OF ITS CHECKS CONSTITUTES GROSS NEGLIGENCE AND BARS IT FROM SETTING UP THE DEFENSE OF FORGERY

BUT FAILURE OF DEPOSITOR TO MAKE PROMPT RECONCILIATION OF THE MONTHLY BANK STATEMENTS FURNISHED BY THE BANK CONSTITUTES NEGLIGENCE FOR WHICH THE BANK CANNOT BE BLAMED IN CASE DEPOSITORS CASE ARE FORGED BUT DRAWER NOT GENERALLY NEGLIGENT WHERE HIS CHECK IS STOLEN PAYEES NEGLIGENCE IN FORGERY OF DRAWERS SIGNATURE The payee in a check may be supposed to have knowledge of the circumstances under which it is drawn and generally, of the person drawing it, and is in a better position to judge the genuineness of the paper than are indorsees. And there is a tendency to place greater responsibility upon him and he is much more likely to be required to return the proceeds of the paper than are the indorsees INDORSERS NEGLIGENCE After a draft or check has once been negotiated so that it is in circulation, there is little opportunity for negligence on the part of those through whose hands it passes; but as to them, in most cases, the rule will apply that, as between innocent parties, the loss must fall on the drawee DUTY OF PURCHASER OF CHECK OR BILL One who purchases a bill or check is bound to satisfy himself that the paper is genuine; and that by indorsing or presenting it for payment or putting it in circulation before presentation, he impliedly asserts that he has performed his duty and the drawee who has without actual negligence on his part, paid the forged demand, may recover the money paid from such negligent purchaser PAPER FORWARDED FOR COLLECTION The fact that the paper wasnt cashed and indorsed with unrestricted indorsement but was taken for collection and forwarded for that purpose under an indrosement giving notice of that fact, may place a greater burden upon the drawee than it would otherwise bear FORGERY OF SIGNATURE IN INSTRUMENT IS FALSIFACTION OF PRIVATE

DOCUMENT FORGER NEED NOT IMITATE GENUINE SIGNATURE One who signs in the name of another without the latters authority, as drawer in a check, and thereby makes it appear falsely that the alleged drawer of the check was a real party thereto, when as a matter of fact he didnt participate in the transaction, is guilty of falsification COMMERCIAL DOCUMENTS Documents or instruments which are used by businessmen or merchants to promote or facilitate trade or credit transactions

NOTICE OF DISHONOR in Negotiable Instruments Sec. 89. To whom notice of dishonor must be given. - Except as herein otherwise provided, when a negotiable instrument has been dishonored by nonacceptance or non-payment, notice of dishonor must be given to the drawer and to each indorser, and any drawer or indorser to whom such notice is not given is discharged. MEANING OF NOTICE By notice of dishonor is meant bringing either verbally or by writing, to the knowledge of the drawer or indorser of an instrument, the fact that a specified negotiable instrument, upon proper proceedings taken, has not been accepted or hasnt been paid, and that the party notified is expected to paid it NECESSITY AND PURPOSE OF NOTICE When an instrument is dishonored by NON-ACCEPTANCE or NONPAYMENT, notice of such dishonor must be given to persons secondarily liable, as the case may be. Otherwise, such parties are discharged BURDEN OF PROOF It is upon the plaintiff who seeks to enforce the defendants liability upon a negotiable instrument as indorser to establish said liability by proving that notice was given to the defendant within the time and in the manner required by the law that

the instrument in question had been dishonored Where these facts are not proven, the plaintiff doesnt sufficiently establish the defendants liability Where there is no proof in record tending to show that the plaintiff gave any notice whatsoever to the defendant that the instrument in question had been dishonored, said plaintiff hasnt established its cause of action PERSONS PRIMARILY LIABLE NEED NOT BE NOTIFIED DOES FAILURE TO GIVE NOTICE OF DISHONOR OF A PREVIOUS INSTALLMENT TO PERSONS SECONDARILY LIABLE ALSO DISCHARGE THEM ON THE SUCCEEDING INSTALLMNETS? It depends on whether the instrument contains an acceleration clause RULE WHERE THERE IS NO ACCELERATION CLAUSE Where the instrument contains no acceleration clause, failure to give notice of dishonor on previous installment doesnt discharge drawers and indorsers as to the succeeding installments, and therefore, the holder can file an action against them for such succeeding installments, notice is given The reason is that each separate installment is equivalent to another note RULE WHERE THERE IS AN ACCELERATION CLAUSE It depends whether the clause is optional or automatic If it is automatic, failure to give notice of dishonor as to a previous installment will discharge the persons secondarily liable as to the succeeding installments If it is optional and it is not exercised, the rule would be the same as where there is no acceleration clause EXCEPTIONS TO REQUIREMENT OF NOTICE The law provides for exceptions on failure to give notice would discharge drawer or indorsers Sec. 90. By whom given. - The notice may be given by or on behalf of the holder, or by or on behalf of any 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 the notice is given. NOTICE MAY BE GIVEN BY 1. The holder 2. Another in behalf of the holder 3. Any party to the instrument who may be compelled to pay it to the holder against any party whom he has a right of reimbursement should such party giving notice pay the instrument 4. Another person in behalf of such party Sec. 91. Notice given by agent. - Notice of dishonor may be given by any agent either in his own name or in the name of any party entitled to given notice, whether that party be his principal or not. NOTICE OF AGENT Notice may be given by the agent and it is not necessary that the agent be authorized by the principal He may give the notice in his name or in the name of his principal A collecting bank may give notice, and where it has done so, no notice from the owner is necessary And where the cashier of the drawee bank which had refused to pay a check gave the check to a notary to protest, which was done, it was held that the possession of the check by the cashier was evidence of his agency of the holder to present it for protest Sec. 92. Effect of notice on behalf of holder. - Where notice is given by or on behalf of the holder, it inures to the benefit of all subsequent holders and all prior parties who have a right of recourse against the party to whom it is given. MEANING OF BENEFIT Benefit refers to the right to charge the person secondarily liable who received notice The party to whom this benefit inures can charge the party receiving notice of dishonor, even if himself didnt give the notice INURES TO THE BENEFIT OF THE FOLLOWING

1. All parties prior to the holder, who have a right of recourse against the party to whom the notice is given 2. All holders subsequent to the holder giving notice Sec. 93. Effect where notice is given by party entitled thereto. - Where notice is given by or on behalf of a party entitled to give notice, it inures to the benefit of the holder and all parties subsequent to the party to whom notice is given. APPLICATION OF THIS SECTION Follows the same principle as the preceding section but this time, the person giving notice is not the holder but a party to the instrument who might be compelled to pay it to the holder, and who, upon taking t up, would have a right of reimbursement from the party to whom notice is given Sec. 94. When agent may give notice. - Where the instrument has been dishonored in the hands of an agent, he may either himself give notice to the parties liable thereon, or he may give notice to his principal. If he gives notice to his principal, he must do so within the same time as if he were the holder, and the principal, upon the receipt of such notice, has himself the same time for giving notice as if the agent had been an independent holder. WHEN AGENTS NOTICE MUST BE GIVEN When an instrument is dishonored in the hands of an agent, he can do either of the following o Directly give notice to the persons secondarily liable thereon o Give notice to his principal If the agent decides to give notice to the principal, he must give notice within the time allowed by law as if he were a holder The principal has also the same time to give notice to the persons secondarily liable Sec. 95. When notice sufficient. - 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 the notice is given is in fact misled thereby.

Sec. 96. Form of notice. - The notice may be in writing or 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. It may in all cases be given by delivering it personally or through the mails. FORM AND CONTENTS OF NOTICE It may be oral or in writing Whether oral or in writing, it must contain 1. SUFFICIENT DESCRIPTION OF THE INSTRUMENT TO IDENTIFY IT, and 2. A STATEMENT THAT IT HAS BEEN PRESENTED FOR PAYMENT AND FOR ACCEPTANCE, AND THAT IT HAS BEEN DISHONORED, and 3. A STATEMENT THAT THE PARTY GIVING NOTICE INTENDS TO LOOK FOR THE PARTY ADDRESSED FOR PAYMENT EFFECTS OF DEFECTS IN NOTICE If the notice is not signed, it will not invalidate it If the notice is written and doesnt contain #2 and #3, it can be supplemented by oral communication stating the things lacking If there is misdescription, it would only vitiate the notice if the person is misled thereby NOTICE BY PHONE This could be done however it must be shown that the party to be notified was really communicated with, that is, fully identified as to the party at the receiving end of the line MANNER OF GIVING NOTICE May be given by personal delivery or by mail Sec. 97. To whom notice may be given. - Notice of dishonor may be given either to the party himself or to his agent in that behalf. NOTICE MAY BE GIVEN 1. 2. To the party himself To his agent in his behalf

 An accommodation indorser is entitled to notice An irregular indorser must also be given notice if he is to be charged And if notice is given to an agent, he must be duly authorized to receive the notice of dishonor AGENT DISTINGUISHED FROM PERSON PRESENT IN ABSENCE OF PARTY Notice to agent must be distinguished from notice attempted to be given to party himself where he is absent at his place of business or residence. In such a case, the notice may be left with anyone found in charge therein Sec. 98. Notice where party is dead. - When any party is dead and his death is known to the party giving notice, the notice must be given to a personal representative, if there be one, and if with reasonable diligence, he can be found. If there be no personal representative, notice may be sent to the last residence or last place of business of the deceased. REQUISITES FOR NOTICE TO REPRESENTATIVE 1. 2. 3. Death is known to the party giving notice There is a personal representative If with reasonable diligence he could be found

WHEN NOTICE MAY BE SENT TO THE LAST RESIDENCE OR PLACE OF BUSINESS 1. If his death is not known to the party giving notice 2. Or although his death is known to the party giving notice but there is no personal representative 3. If there be one but he cannot be found with reasonable diligence Sec. 99. Notice to partners. - Where the parties to be notified are partners, notice to any one partner is notice to the firm, even though there has been a dissolution. Sec. 100. Notice to persons jointly liable. - Notice to joint persons who are not partners must be given to each of them unless one of them has authority to receive such notice for the others. PROVISION WOULD APPLY ONLY TO JOINT DRAWERS

Sec. 101. Notice to bankrupt. - Where a party has been adjudged a bankrupt or an insolvent, or has made an assignment for the benefit of creditors, notice may be given either to the party himself or to his trustee or assignee. APPLICATION OF SECTION 1. Where the party secondarily liable has been declared a bankrupt or an insolvent 2. Where he has made an assignment of his properties for the benefits of creditors In such cases, notice be given to the party himself or his trustee or assignee Sec. 102. Time within which notice must be given. - Notice may be given as soon as the instrument is dishonored and, unless delay is excused as hereinafter provided, must be given within the time fixed by this Act. MAY NOTICE OF DISHONOR BE GIVEN BEFORE THE DATE OF MATURITY No, such notice would be insufficient because an instrument cannot be said to be dishonored for non-payment unless presented and presentment must be made on the date of maturity unless of course, presentment is excused But even in such cases, the instrument cannot be said to be dishonored by non-payment unless it is overdue and unpaid Notice of dishonor can be given only after the instrument has been actually dishonored, and notice given before the paper due is premature and insufficient, regardless of the indorsers knowledge that the maker was in default MAY NOTICE OF DISHONOR BE GIVEN ON THE DATE OF MATURITY? Yes, provided that the instrument has been presented for payment and is has been dishonored But if the instrument is payable at a bank, it is not dishonored if the maker deposits the amount of the instrument before the close of banking hours. Hence, notice of dishonor must be given after the close of banking hours on the date of maturity PURPOSE OF PROMPT NOTICE

 To give the persons secondarily liable every opportunity to secure themselves such as to enable the party to be charged to preserve and protect his rights against prior parties Sec. 103. Where parties reside in same place. - Where the person giving and the person to receive notice reside in the same place, notice must be given within the following times: (a) If given at the place of business of the person to receive notice, it must be given before the close of business hours on the day following. (b) If given at his residence, it must be given before the usual hours of rest on the day following. (c) If sent by mail, it must be deposited in the post office in time to reach him in usual course on the day following. Sec. 104. Where parties reside in different places. - Where the person giving and the person to receive notice reside in different places, the notice must be given within the following times: (a) If sent by mail, it must be deposited in the post office in time to go by mail the day following the day of dishonor, or if there be no mail at a convenient hour on last day, by the next mail thereafter. (b) If given otherwise than through the post office, then within the time that notice would have been received in due course of mail, if it had been deposited in the post office within the time specified in the last subdivision. (TO REACH HIM IN USUAL COURSE THE DAY FOLLOWING) TIME FOR GIVING NOTICE IN GENERAL The law provides for a different period for giving notice of dishonor depending on whetherthe party giving notice and the party to receive notice reside in the same place; or the party giving notice and the party to receive reside in different places

MEANING OF THE SAME PLACE Refers to the corporate limits of a town or city where the presentment is made or where the holder resides EFFECT OF NOTICE GIVEN OUT OF TIME Unless excused, notice given out of time would be considered not to have been given Hence, the party to receive notice would be discharged Sec. 105. When sender deemed to have given due notice. - Where 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. APPLICATION OF SECTION 105 A party giving notice is deemed to have given due notice where the notice of dishonor is duly addressed and deposited in the post office, even when there is miscarriage of mail CONCLUSIVE PRESUMPTION Sec. 106. Deposit in post office; what constitutes. - 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. DEPOSIT IN LETTER BOX The letter box must be under the control of the post office department Otherwise, notice wouldnt deemed to have been deposited in the post office Thus, a notice of protest properly addressed and left in a place in a notarys office where mail was usually collected by his postman was held not a mailing of the notice as required by the statute Sec. 107. Notice to subsequent party; time of. - Where 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. 108. Where notice must be sent. - Where a party has added an address to his signature, notice of dishonor must be sent to that 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 of residence or to the postoffice where he is accustomed to receive his letters; or (b) If he lives in one place and has his place of business in another, notice may be sent to either place; or (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 requirement of this section. Sec. 109. Waiver of notice. - Notice of dishonor may be waived either before the time of giving notice has arrived or after the omission to give due notice, and the waiver may be expressed or implied. WHEN WAIVER MAY BE MADE 1. Before the time of giving notice, such as express waiver in the body of the instrument or added to the signature of the party 2. After omission to give due notice IMPLIED WAIVER Waiver may be implied from acts, declarations, or silence Sec. 110. Whom affected by waiver. - Where the waiver is embodied in the instrument itself, it is binding upon all parties; but, where it is written above the signature of an indorser, it binds him only. WHOM AFFECTED BY WAIVER IN GENERAL The persons affected by waiver depends upon whether the waiver is in the instrument itself or is written above the signature of the indorser If the waiver is embodied in the instrument itself, it is binding upon all parties If the waiver is written above the signature of an indorser, it binds him only

Sec. 111. Waiver of protest. - A waiver of protest, whether in the case of a foreign bill of exchange or other negotiable instrument, is deemed to be a waiver not only of a formal protest but also of presentment and notice of dishonor. WHERE PROTEST IS WAIVED, THE FOLLOWING ARE INCLUDED AND ARE DEEMED WAIVED ALSO 1. Presentment 2. Notice of dishonor Where presentment for payment is waived, notice of dishonor is also waived But where notice of dishonor is waived, presentment for payment is not waived Sec. 112. When notice is dispensed with. - Notice of dishonor is dispensed with when, after the exercise of reasonable diligence, it cannot be given to or does not reach the parties sought to be charged. WHEN NOTICE EXCUSED When political disturbances interrupt and obstruct the ordinary negotiations of trade, they constitute a sufficient excuse for want of presentment or notice, upon the same principle that controls in cases of military operations or interdictions of commerce Prevalence of a malignant, contagious, infectious disease Sec. 113. Delay in giving notice; how excused. - Delay in giving notice of dishonor 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 delay ceases to operate, notice must be given with reasonable diligence. Sec. 114. When notice need not be given to drawer. - Notice of dishonor is not required to be given to the drawer in either of the following cases: (a) Where the drawer and drawee are the same person; (b) When the drawee is fictitious person or a person not having capacity to contract;

(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. Sec. 115. When notice need not be given to indorser. Notice of dishonor is not required to be given to an indorser in either of the following cases: (a) When the drawee is a fictitious person or person not having capacity to contract, and the indorser was aware of that 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. WHEN NOTICE RELATIVELY EXCUSED 1. Where he has knowledge of the dishonor by means other than through a formal notice, as when he is both the drawee and drawer or when presentment is made to him 2. Where he has no reason to expect that the instrument will be honored, as when he has countermanded payment or where the drawee is fictitious or without capacity to contract NO RIGHT TO EXPECT OR REQUIRE PAYMENT AS TO DRAWER 1. Where the drawer of the check has no account with the drawee bank 2. When the drawer of a check payable abroad has no funds with the drawee bank to meet it 3. When the knowledge that previous drafts on the same consignee had been dishonored.

In the foregoing, the drawer has no right to receive notice of dishonor

DRAWER HAS COUNTERMANDED PAYMENT A drawer tells drawee B not to pay the bill. F holder need not give notice to A drawer. An allegation that payment of a check had been countermanded is sufficiently set out where the check was set forth with the indorsement across the face Payment stopped DRAWEE FICTITIOUS, ETC. MUST BE MADE KNOWN AS TO INDORSERS The indorser must be aware of the fact that the drawee is fictitious or not having capacity to contract. Otherwise, notice of dishonor must be given to such indorser to charge him. But the fact that that the indorser knew the maker to be insolvent or that the instrument was dishonored doesnt dispense with the necessity of notice Sec. 116. Notice of non-payment where acceptance refused. - Where due notice of dishonor by non-acceptance has been given, notice of a subsequent dishonor by non-payment is not necessary unless in the meantime the instrument has been accepted. Sec. 117. Effect of omission to give notice of non-acceptance. - 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. SUMMARY AS TO NOTICE OF DISHONOR 1. Like presentment for payment, notice of dishonor need not be given to persons primarily liable in order to charge them 2. But aside from presentment for payment to persons primarily liable, notice of dishonor to persons secondarily liable is necessary to charge the latter except a. When notice is waived b. When dispensed with under Section 112 c. As to drawer, under Section 114 d. As to indorser, under Section 115 e. Where due notice of dishonor by non-acceptance has been given f. As to a holder in due course without notice Sec. 118. When protest need not be made; when must be made. - Where any negotiable instrument has been dishonored, it may be protested for nonacceptance or non-payment, as the case may be; but protest is not required

except in the case of foreign bills of exchange. WHEN PROTEST NECESSARY Protest is necessary with regard foreign bills of exchange Mere fact of protest is not conclusive upon the dishonor of the instrument and due notice to the indorser; other evidence is competent on these questions While protest is not required in cases of promissory notes and inland bills, it is usual to protest these instruments also when dishonored since the notarys certificate of protest is the most convenient and certain mode of proving the facts

(3) A writes a promissory note in favor of his creditor, B. It says: "Subject to my option, I promise to pay B Php1 Million or his order or give Php1 Million worth of cement or to authorize him to sell my house worth Php1 Million. Signed, A." Is the note negotiable? (A) No, because the exercise of the option to pay lies with A, the maker and debtor. (B) No, because it authorizes the sale of collateral securities in case the note is not paid at maturity. (C) Yes, because the note is really payable to B or his order, the other provisions being merely optional. (D) Yes, because an election to require something to be done in lieu of payment of money does not affect negotiability. (5) M makes a promissory note that states: "I, M, promise to pay Php5,000.00 to B or bearer. Signed, M." M negotiated the note by delivery to B, B to N, and N to O. B had known that M was bankrupt when M issued the note. Who would be liable to O? (A) M and N since they may be assumed to know of M's bankruptcy (B) N, being O's immediate negotiator of a bearer note (C) B, M, and N, being indorsers by delivery of a bearer note (D) B, having known of M's bankruptcy (8) A negotiable instrument can be indorsed by way of a restrictive indorsement, which prohibits further negotiation and constitutes the indorsee as agent of the indorser. As agent, the indorsee has the right, among others, to

(A) demand payment of the instrument only. (B) notify the drawer of the payment of the instrument. (C) receive payment of the instrument. (D) instruct that payment be made to the drawee. (9) Under the Negotiable Instruments Law, a signature by procuration operates as a notice that the agent has but a limited authority to sign. Thus, a person who takes a bill that is drawn, accepted, or indorsed by procuration is duty-bound to inquire into the extent of the agent's authority by: (A) examining the agents special power of attorney. (B) examining the bill to determine the extent of such authority. (C) asking the agent about the extent of such authority. (D) asking the principal about the extent of such authority. (10) Under the Negotiable Instruments Law, if the holder has a lien on the instrument which arises either from a contract or by implication of law, he would be a holder for value to the extent of (A) his successor's interest. (B) his predecessor's interest. (C) the lien in his favor. (D) the amount indicated on the instrument's face. (13) X executed a promissory note with a face value of Php50,000.00, payable to the order of Y. Y indorsed the note to Z, to whom Y owed Php30,000.00. If X has no defense at all against Y, for how much may Z collect from X? (A) Php20,000.00, as he is a holder for value to the extent of the difference between Y's debt and the value of the note. (B) Php30,000.00, as he is a holder for value to the extent of his lien. (C) Php50,000.00, but with the obligation to hold Php20,000.00 for Y's benefit. (D) None, as Z's remedy is to run after his debtor, Y.

(16) P sold to M 10 grams of shabu worth Php5,000.00. As he had no money at the time of the sale, M wrote a promissory note promising to pay P or his order Php5,000. P then indorsed the note to X (who did not know about the shabu), and X to Y. Unable to collect from P, Y then sued X on the note. X set up the defense of illegality of consideration. Is he correct? (A) No, since X, being a subsequent indorser, warrants that the note is valid and subsisting. (B) No, since X, a general indorser, warrants that the note is valid and subsisting. (C) Yes, since a void contract does not give rise to any right. (D) Yes, since the note was born of an illegal consideration which is a real defense. (18) A holder in due course holds the instrument free from any defect of title of prior parties and free from defenses available to prior parties among themselves. An example of such a defense is (A) fraud in inducement. (B) duress amounting to forgery. (C) fraud in esse contractus. (D) alteration. (24) X is the holder of an instrument payable to him (X) or his order, with Y as maker. X then indorsed it as follows: "Subject to no recourse, pay to Z. Signed, X." When Z went to collect from Y, it turned out that Y's signature was forged. Z now sues X for collection. Will it prosper? (A) Yes, because X, as a conditional indorser, warrants that the note is genuine. (B) Yes, because X, as a qualified indorser, warrants that the note is genuine. (C) No, because X made a qualified indorsement. (D) No, because a qualified indorsement does not include the warranty of genuineness. (25) A bill of exchange has T for its drawee, U as drawer, and F as holder. When F went to T for presentment, F learned that T is only 15 years old. F wants to recover from U but the latter insists that a notice of dishonor must first be made, the instrument being a bill of exchange. Is he correct?

(A) Yes, since a notice of dishonor is essential to charging the drawer. (B) No, since T can waive the requirement of notice of dishonor. (C) No, since F can treat U as maker due to the minority of T, the drawee. (D) Yes, since in a bill of exchange, notice of dishonor is at all times required. (28) X, drawee of a bill of exchange, wrote the words: "Accepted, with promise to make payment within two days. Signed, X." The drawer questioned the acceptance as invalid. Is the acceptance valid? (A) Yes, because the acceptance is in reality a clear assent to the order of the drawer to pay. (B) Yes, because the form of the acceptance is really immaterial. (C) No, because the acceptance must be a clear assent to the order of the drawer to pay. (D) No, because the document must not express that the drawee will perform his promise within two days. (30) D, debtor of C, wrote a promissory note payable to the order of C. C's brother, M, misrepresenting himself as Cs agent, obtained the note from D, then negotiated it to N after forging C's signature. N indorsed it to E, who indorsed it to F, a holder in due course. May F recover from E? (A) No, since the forgery of C's signature results in the discharge of E. (B) Yes, since only the forged signature is inoperative and E is bound as indorser. (C) No, since the signature of C, the payee, was forged. (D) Yes, since the signature of C is immaterial, he being the payee. (31) A material alteration of an instrument without the assent of all parties liable thereon results in its avoidance, EXCEPT against a (A) prior indorsee. (B) subsequent acceptor. (C) subsequent indorser.

(D) prior acceptor. (33) B borrowed Php1 million from L and offered to him his BMW car worth Php1 Million as collateral. B then executed a promissory note that reads: "I, B, promise to pay L or bearer the amount of Php1 Million and to keep my BMW car (loan collateral) free from any other encumbrance. Signed, B." Is this note negotiable? (A) Yes, since it is payable to bearer. (B) Yes, since it contains an unconditional promise to pay a sum certain in money. (C) No, since the promise to just pay a sum of money is unclear. (D) No, since it contains a promise to do an act in addition to the payment of money. (36) If the drawer and the drawee are the same person, the holder may present the instrument for payment without need of a previous presentment for acceptance. In such a case, the holder treats it as a (A) non-negotiable instrument. (B) promissory note. (C) letter of credit. (D) check. (37) D draws a bill of exchange that states: "One month from date, pay to B or his order Php100,000.00. Signed, D." The drawee named in the bill is E. B negotiated the bill to M, M to N, N to O, and O to P. Due to non-acceptance and after proceedings for dishonor were made, P asked O to pay, which O did. From whom may O recover? (A) B, being the payee (B) N, as indorser to O (C) E, being the drawee (D) D, being the drawer (45) A bill of exchange has D as drawer, E as drawee and F as payee. The bill was then indorsed to G, G to H, and H to I. I, the current holder presented the bill to E for acceptance. E accepted but, as it later turned out, D is a fictitious person. Is E freed from liability?

(A) No, since by accepting, E admits the existence of the drawer. (B) No, since by accepting, E warrants that he is solvent. (C) Yes, if E was not aware of that fact at the time of acceptance. (D) Yes, since a bill of exchange with a fictitious drawer is void and inexistent. (46) Due to his debt to C, D wrote a promissory note which is payable to the order of C. C's brother, M, misrepresenting himself as agent of C, obtained the note from D. M then negotiated the note to N after forging the signature of C. May N enforce the note against D? (A) Yes, since D is the principal debtor. (B) No, since the signature of C was forged. (C) No, since it is C who can enforce it, the note being payable to the order of C. (D) Yes, since D, as maker, is primarily liable on the note. (50) M, the maker, issued a promissory note to P, the payee which states: "I, M, promise to pay P or order the amount of Php1 Million. Signed, M." P negotiated the note by indorsement to N, then N to O also by indorsement, and O to Q, again by indorsement. But before O indorsed the note to Q, O's wife wrote the figure "2" on the note after "Php1" without O's knowledge, making it appear that the note is for Php12 Million. For how much is O liable to Q? (A) Php1 Million since it is the original tenor of the note. (B) Php1 Million since he warrants that the note is genuine and in all respects what it purports to be. (C) Php12 Million since he warrants his solvency and that he has a good title to the note. (D) Php12 Million since he warrants that the note is genuine and in all respects what it purports to be. (52) Notice of dishonor is not required to be made in all cases. One instance where such notice is not necessary is when the indorser is the one to whom the instrument is suppose to be presented for payment. The rationale here is that the indorser (A) already knows of the dishonor and it makes no sense to notify him of it. (B) is bound to make the acceptance in all cases.

(C) has no reason to expect the dishonor of the instrument. (D) must be made to account for all his actions. (59) Which of the following indorsers expressly warrants in negotiating an instrument that 1) it is genuine and true; 2) he has a good title to it; 3) all prior parties have capacity to negotiate; and 4) it is valid and subsisting at the time of his indorsement? (A) The irregular indorser. (B) The regular indorser. (C) The general indorser. (D) The qualified indorser. (63) Forgery of bills of exchange may be subdivided into, a) forgery of an indorsement on the bill and b) forgery of the drawer's signature, which may either be with acceptance by the drawee, or (A) with acceptance but the bill is paid by the drawee. (B) without acceptance but the bill is paid by the drawer. (C) without acceptance but the bill is paid by the drawee. (D) with acceptance but the bill is paid by the drawer. (65) X found a check on the street, drawn by Y against ABC Bank, with Z as payee. X forged Z's signature as an indorser, then indorsed it personally and delivered it to DEF Bank. The latter, in turn, indorsed it to ABC Bank which charged it to the Ys account. Y later sued ABC Bank but it set up the forgery as its defense. Will it prosper? (A) No, since the payee's signature has been forged. (B) No, since Ys remedy is to run after the forger, X. (C) Yes, since forgery is only a personal defense. (D) Yes, since ABC Bank is bound to know the signature of Y, its client. (71) Can a drawee who accepts a materially altered check recover from the holder and the drawer? (A) No, he cannot recover from either of them.

(B) Yes from both of them. (C) Yes but only from the drawer. (D) Yes but only from the holder. (72) The rule is that the intentional cancellation of a person secondarily liable results in the discharge of the latter. With respect to an indorser, the holder's right to cancel his signature is: (A) without limitation. (B) not limited to the case where the indorsement is necessary to his title. (C) limited to the case where the indorsement is not necessary to his title. (75) X executed a promissory note in favor of Y by way of accommodation. It says: "Pay to Y or order the amount of Php50,000.00. Signed, X." Y then indorsed the note to Z, and Z to T. When T sought collection from Y, the latter countered as indorser that there should have been a presentment first to the maker who dishonors it. Is Y correct? (A) No, since Y is the real debtor and thus, there is no need for presentment for payment and dishonor by the maker. (B) Yes, since as an indorser who is secondarily liable, there must first be presentment for payment and dishonor by the maker. (C) No, since the absolute rule is that there is no need for presentment for payment and dishonor to hold an indorser liable. (D) Yes, since the secondary liability of Y and Z would only arise after presentment for payment and dishonor by the maker. (D) limited to the case where the indorsement is necessary to his title. (85) A promissory note states, on its face: "I, X, promise to pay Y the amount of Php 5,000.00 five days after completion of the on-going construction of my house. Signed, X." Is the note negotiable? (A) Yes, since it is payable at a fixed period after the occurrence of a specified event. (B) No, since it is payable at a fixed period after the occurrence of an event which may not happen. (C) Yes, since it is payable at a fixed period or determinable future time.

(D) No, since it should be payable at a fixed period before the occurrence of a specified event. (86) P sold to M a pair of gecko (tuko) for Php50,000.00. M then issued a promissory note to P promising to pay the money within 90 days. Unknown to P and M, a law was passed a month before the sale that prohibits and declares void any agreement to sell gecko in the country. If X acquired the note in good faith and for value, may he enforce payment on it? (A) No, since the law declared void the contract on which the promissory note was founded. (B) No, since it was not X who bought the gecko. (C) Yes, since he is a holder in due course of a note which is distinct from the sale of gecko. (D) Yes, since he is a holder in due course and P and M were not aware of the law that prohibited the sale of gecko. (87) P authorized A to sign a bill of exchange in his (Ps) name. The bill reads: "Pay to B or order the sum of Php1 million. Signed, A (for and in behalf of P)." The bill was drawn on P. B indorsed the bill to C, C to D, and D to E. May E treat the bill as a promissory note? (A) No, because the instrument is payable to order and has been indorsed several times. (B) Yes, because the drawer and drawee are one and the same person. (C) No, because the instrument is a bill of exchange. (D) Yes, because A was only an agent of P. (88) Z wrote out an instrument that states: "Pay to X the amount of Php1 Million for collection only. Signed, Z." X indorsed it to his creditor, Y, to whom he owed Php1 million. Y now wants to collect and satisfy X's debt through the Php1 million on the check. May he validly do so? (A) Yes, since the indorsement to Y is for Php1 Million. (B) No, since Z is not a party to the loan between X and Y. (C) No, since X is merely an agent of Z, his only right being to collect. (D) Yes, since X owed Y Php1 Million.

(92) In a signature by procuration, the principal is bound only in case the agent acted within the actual limits of his authority. The signature of the agent in such a case operates as notice that he has (A) a qualified authority to sign. (B) a limited authority to sign. (C) a special authority to sign. (D) full authority to sign. (94) A bill of exchange states on its face: "One (1) month after sight, pay to the order of Mr. R the amount of Php50,000.00, chargeable to the account of Mr. S. Signed, Mr. T." Mr. S, the drawee, accepted the bill upon presentment by writing on it the words "I shall pay Php30,000.00 three (3) months after sight." May he accept under such terms, which varies the command in the bill of exchange? (A) Yes, since a drawee accepts according to the tenor of his acceptance. (B) No, since, once he accepts, a drawee is liable according to the tenor of the bill. (C) Yes, provided the drawer and payee agree to the acceptance. (D) No, since he is bound as drawee to accept the bill according to its tenor. (95) May the indorsee of a promissory note indorsed to him "for deposit" file a suit against the indorser? (A) Yes, as long as the indorser received value for the restrictive indorsement. (B) Yes, as long as the indorser received value for the conditional indorsement. (C) Yes, whether or not the indorser received value for the conditional indorsement. (D) Yes, whether or not the indorser received value for the restrictive indorsement. (96) X issued a check in favor of his creditor, Y. It reads: " Pay to Y the amount of Seven Thousand Hundred Pesos (Php700,000.00). Signed, X". What amount should be construed as true in such a case? (A) Php700,000.00.

(B) Php700.00. (C) Php7,000.00. (D) Php700,100.00. (99) P authorized A to sign a negotiable instrument in his (Ps) name. It reads: "Pay to B or order the sum of Php1 million. Signed, A (for and in behalf of P)." The instrument shows that it was drawn on P. B then indorsed to C, C to D, and D to E. E then treated it as a bill of exchange. Is presentment for acceptance necessary in this case? (A) No, since the drawer and drawee are the same person. (B) No, since the bill is non-negotiable, the drawer and drawee being the same person. (C) Yes, since the bill is payable to order, presentment is required for acceptance. (D) Yes, in order to hold all persons liable on the bill.