CHAPTER VI

PRESENTMENT FOR PAYMENT

Sec. 70. Effect of want of demand on the principal debtor.
Presentment for payment is not necessary in order to charge the
person primarily liable on the instrument.; but if the instrument is, by its
terms, payable at a special place, and he is able and willing to pay it there at
maturity, such ability and willingness are equivalent to tender of payment
upon his part. But, except as otherwise provided, presentment for payment
is necessary in order to charge the drawer and indorsers.
Presentment for payment the presentment of an instrument to the
person primarily liable for the purpose of demanding and receiving payment.
*The ability and willingness on the part of the primary party to pay there at
maturity are equivalent to a tender or offer of payment on his part so that if
the instrument is not paid and is overdue, he cannot be considered in delay
and, therefore, not being at fault, he is not liable for costs and interest
subsequently accruing although he is not relieved from making payment of
the amount due.
The persons secondarily liable, that is, the drawer and the indorsers, stand
on a different footing. Since they undertake to pay only if the instrument is
dishonored, it is obvious that a demand for payment must be first made
upon the person primarily liable. The demand is effected by presenting the
instrument to him for payment.
In the event of non-acceptance or non-payment, notice of dishonor must be
given to the drawer and each indorser, otherwise, the party to whom notice
is not given will be released from liability. Dishonor of the instrument
activates the secondary liability of the drawer and indorsers.
If the instrument is not presented to the person primarily liable, the drawer
and the indorsers are discharged from their secondary liability unless such
presentment is (1) excused or (2) dispensed with.
Sec. 71. Presentment where instrument is not payable on demand
and where payable on demand.
Where the instrument is not payable on demand presentment must
be made on the day it falls due.
Where it is payable on demand (promissory note) presentment must be
made within a reasonable time after its issue.

Where it is payable on demand (bill of exchange) presentment for

payment will be sufficient if made within a reasonable time after the last
negotiation.
Last negotiation last transfer for value.
Sec. 72. What constitutes sufficient presentment.
Presentment for payment, to be sufficient, must be made HRPP
1. By the Holder, or by some person authorized to receive payment on
his behalf;
2. At a Reasonable hour on a business day;
3. At a Proper place as herein defined;
4. To the Person primarily liable on the instrument, or if he is absent or
inaccessible, to any person found at the place where presentment is
made.
If payable at a bank presentment must be made during banking hours.
If presented at a place of business it must be made during the usual
business hours in that place.
If presented at the residence of the person liable to pay it must be
made between the usual hours of rising and retiring.
Sec. 73. Place of presentment.
Presentment for payment is made at the proper place: SAUO
1. Where a place for payment is Specified in the instrument and it is
there presented;
2. Where no place of payment is specified, but the Address of the
person to make the payment is given in the instrument and it is
there presented;
3. Where no place of payment is specified and no address is given and
the instrument is presented at the Usual place of business or
residence of the person to make payment;
4. In any Other case if presented to the person to make payment (1)
wherever he can be found, or (2) if presented at his last known place
of business or residence.
Sec. 74. Instrument must be exhibited.
The instrument must be exhibited to the person from where payment is
demanded, and when it is paid must be delivered up to the party paying it.
Purpose of exhibition To enable the debtor:
1. To determine the genuineness of the instrument and the
indorsements and the right of the holder to receive payment; and
2. To enable him upon payment, to take possession of it to guard
against a lawsuit by a subsequent holder.

If the instrument is not exhibited, the presentment would be ineffectual as

the debtor is entitled to see the instrument and demand its surrender upon
payment.
But the instrument need not actually be exhibited unless such exhibition is
demanded. Thus, the makers right to an exhibition of a note is waived
when he does not demand to see the note and he refuses payment on some
other ground.
Sec. 75. Presentment where instrument payable at bank.
Where the instrument is payable at a bank, presentment for payment must
be made during banking hours, unless the person to make payment has
no funds there to meet it at any time during the day, in which case
presentment at any hour before the bank is closed on that day is
sufficient.
If the instrument is payable at a bank and the person to make payment has
funds in the bank to meet it in the date of maturity, presentment must be
made during banking hours. Presentment made outside banking hours is not
sufficient inasmuch as banks do not make payment outside of banking hours.
Persons secondarily liable will be discharged. But in the absence of evidence
to the contrary, the instrument will be presumed to have been presented
during banking hours.

made to any one of them, even though there has been a dissolution of the
firm.
Each partner is an agent of the partnership or his co-partners and is
presumed to have authority to act for the others. A dishonor by one is a
dishonor by all.
The same rule applies even though there has been a dissolution of the
partnership. This if a partner dies before maturity of a partnership note, a
demand on the surviving partner will be sufficient.
Sec. 78. Presentment to joint debtors.
Where there are several persons, not partners, primarily liable on the
instrument, and no place of payment is specified, presentment must be
made to all of them.
If the parties primarily liable are not partners, their liability is only joint.
Sec. 79. When presentment not required to charge the drawer.
Presentment for payment is not required in order to charge the drawer
where he has no right to expect or require that the drawee or acceptor will
pay the instrument.

If the person to make payment has no funds in the bank to meet the
payment any time during the day, presentment at any hour before the bank
is closed is sufficient to hold persons secondarily liable. The reason is that
even if presentment was made during banking hours, the instrument could
not have been paid just the same.

Thus, presentment is not required to charge a drawer where:

1. He has no funds with the drawee, unless arrangement has been
made for payment of the bill
2. The drawer of a check has stopped payment thereof
3. The drawer of a check has withdrawn funds from the drawee-bank
leaving nothing with which to pay the check.

Sec. 76. Presentment where principal debtor is dead.

Where the person primarily liable on the instrument is dead, and no place
of payment is specified, presentment for payment must be made to his
personal representative, if such there be, and if, with the exercise of
reasonable diligence, he can be found.

Sec. 80. When presentment not required to charge the indorser.

Presentment for payment is not required in order to charge an indorser
where the instrument was made or accepted for his accommodation
and he has no reason to expect that the instrument will be paid if
presented.

But presentment may be dispensed with if, with the exercise of reasonable
diligence, no personal representative can be found. However, the holder is
not excused from giving notice of dishonor to the indorser, if he wishes to
hold the latter liable on the instrument.

*The reason for the rule is that the accommodated payee-indorser is the real
debtor and not the maker or acceptor. Hence, he is not discharged even if no
presentment for payment is made to the maker or acceptor who, in
substance, is a surety for the debt.

Sec. 77. Presentment to persons liable as partners.

Where the persons primarily liable on the instrument are liable as partners,
and no place of payment is specified, presentment for payment must be

Sec. 81. When delay in making presentment is excused.

Delay in making presentment for payment is excused when the delay is
caused by (1) circumstances beyond the control of the holder, and (2) not

imputable to his default, misconduct, or negligence. When the cause of delay

ceases to operate, presentment must be made with reasonable diligence.

there has been no presentment for payment and presentment is not

excused, the instrument is not dishonored although it is already overdue and
unpaid.

Circumstances beyond the control of the holder are events which could not
be foreseen, or which, though foreseen, are inevitable.

Sec. 82. When presentment may be dispensed with.

Presentment for payment is dispensed with ADW
1. Where After the exercise of reasonable diligence, presentment, as
required by this Act cannot be made;
2. Where the Drawee is a fictitious person;
3. By Waiver of presentment, express or implied.
Reasonable diligence implies active search.
Summary of rules as to presentment
1. Presentment for payment is not necessary to charge persons
primarily liable but is necessary to charge persons secondarily liable.
2. In the following cases, presentment for payment is not necessary to
charge persons secondarily liable:
a. As to drawer, under Sec. 79;
b. As to indorser, under Sec. 80;
c. When presentment is dispensed with under Sec. 82;
d. When the bill has been dishonored by non-acceptance as
provided in Sec. 151.
Sec. 83. When instrument dishonored by non-payment.
The instrument is dishonored by non-payment when:
1. It is (a) duly presented for payment and (b) payment is refused or
cannot be obtained; or
2. (a) Presentment is excused and the instrument is (b) overdue and
(c) unpaid.
An instrument is dishonored by non-payment as long as it is not paid
although the primary party may be willing to pay. Thus there is already
dishonor where on presentment, the maker promises to pay 5 days later.
If presentment is waived, the instrument is deemed dishonored if it is
overdue and unpaid even if the holder did not make presentment.
Although presentment may be excused, the indorser is still entitled to notice
of dishonor if the instrument by its being overdue and unpaid. But where

Sec. 84. Liability of the person secondarily liable, when instrument

dishonored.
Subject to the provisions of this Act, when the instrument is dishonored by
non-payment, an immediate right of recourse to all parties secondarily liable
thereon accrues to the holder.
The immediate right of recourse against secondary parties will accrue only
after the giving of due notice of dishonor to them.
To hold
1.
2.
3.

a secondary party liable, the holder must prove at least 3 things:

Presentment was properly made
Primary party dishonored the instrument
Notice of dishonor was properly given to the secondary party.

Sec. 85. Time of maturity.

Every negotiable instrument is payable at the time fixed therein without
grace (if grace is provided in the instrument, the instrument is payable on
the last date of grace).
When the date of maturity falls upon Sunday, or a holiday The
instrument is payable on the next succeeding business day.
If the instrument falls due on a Saturday, and is a time instrument
it should be presented for payment on the next succeeding business day.
If the instrument which falls due on a Saturday is payable on
demand it may be presented for payment before 12 oclock noon on
Saturday, or on Monday, at the option of the holder.
Sec. 86. Time; how computed.
Where the instrument is payable (1) at a fixed period after date, (2) after
sight, or (3) after the happening of a specified event, the time of payment is
determined by excluding the day from which time is to begin to run,
and by including the date of payment.
Sec. 87. Rule where instrument payable at bank.
Where the instrument is made payable at a bank, it is equivalent to an order
to the bank to pay the same for the account of the principal debtor thereon.
An instrument made payable at a bank is equivalent to an order to pay
addressed to the bank.

Sec. 87 applies only where the instrument is payable at a particular named

bank.

The burden of proving due notice or that notice was waived or excused is on
the holder.
The loss of the note does not excuse compliance with Section 89.

Sec. 88. What constitutes payment in due course.

Payment is made in due course when: AHGW
1. It is made At or after the maturity of the instrument;
2. Payment must be made to the Holder;
3. Payment must be in Good faith and Without notice that the holders
title is defective.
CHAPTER VII
NOTICE OF DISHONOR
Sec. 89. To whom notice of dishonor must be given.
Except as herein otherwise provided, when a negotiable instrument has been
dishonored by non-acceptance or non-payment, notice of dishonor must be
given to the drawer and each indorser, and any drawer or indorser to whom
such notice is not given is discharged.
Notice of dishonor the bringing, either verbally or in 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 has not been paid and that the party notified is expected
to pay it.
If such notice is given by a notary public, it is called a protest.
The object of giving notice of dishonor is two-fold:
1. To inform the parties secondarily liable that the maker or acceptor,
as the case may be, has failed to meet his engagement; and
2. To advise such parties that they will be required to make payment.
Any person to whom such notice is not given is discharged. However,
although the indorser to whom notice is not given is discharged, he is still
liable for breach of warranties pertaining to the instrument.
The holder is not required to notify all the indorsers, although the law says
each indorser. He may select to hold only one or some of the indorsers and
any party to who, such notice is not given is discharged.

Each indorser and any indorser include any kind of indorser. Hence, an
accommodation indorser is entitled to notice, and also an irregular indorser,
being likewise an indorser. The holder of a check is entitled to an unqualified
notice of dishonor by the drawee before he is required, in order to hold an
indorser liable, to notify him that payment has been refused.
The general rule enunciated in section 89 is not applicable in the cases
mentioned under sections 109, 111, 112, 114, 115, 116, and 117.
The maker or acceptor do not have to be notified because they are the very
ones who dishonored the instrument.
Sec. 90. By whom given.
Under this section, the notice may be given:
1. By the holder; or
2. Another in behalf of the holder; or
3. By a party to the instrument who may 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; or
4. Another person in behalf of such party.
So, notice by a mere stranger is ineffectual, unless he is acting as agent of a
party who is entitled to give notice of dishonor. It has been held that the
drawee who refuses to accept is not a party or chargeable on the bill, and
notice from him of non-acceptance is no degree better than from any other
stranger.
Example:
M makes a note payable to the order of P. The note is indorsed successively
by P to A, by A to B, by B to C, and by C to D, the present holder. Suppose
the note is dishonored in the hands of D.
D or his agent may give notice of dishonor to P, A, B, and C, the parties
secondarily liable.
If D notifies only C, the latter, who thereby can be compelled by D to pay,
may, in turn, notify P, A, ad B.

B may give notice to A and P whom he can hold liable. Likewise, A may give
notice to P. But A cannot give notice to B because A is the one liable to B who
is a subsequent party, and, therefore, A has no right to reimbursement from
B. For the same reason, P would have no right to notify A.
If D gives notice only to B, the effect is to discharge C due to lack of notice
since B would have no right to notify C.
If B, after having been given notice by D, does not choose to notify P and A,
then the latter would also be discharged from the instrument.
Upon his discharge, C becomes a total stranger and as such, he is not
entitled to give notice, unless he is acting as an agent of a party who can
give proper notice of dishonor.
Sec. 91. Notice given by agent.
Notice of dishonor may be given by an agent either in his own name or in the
name of any party entitled to give notice, whether that party be his principal
or not.
The agent need not be authorized by the principal to give the notice. Under
this section, any person can be an agent of any party entitled to give notice.
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
(1) all subsequent holders and (2) all prior parties who have a right of
recourse against the party to whom it is given.
Notice of dishonor given by or on behalf of the holder inures to the benefit
of:
1. All holders subsequent to the holder who was given notice; and
2. All parties prior to the holder but subsequent to the party whom
notice has been given and against him whom they have a right of
recourse.
Example:
M makes a note payable to P or order. The following are the indorsers of the
note in the order of their indorsements.
P
A
B
C
D Holder
E subsequent holder

The above note is dishonored in the hands of D, who notifies P, A, B, and C.

The notice given by D to P operates to the benefit of A, B, and C, parties
subsequent to P, and E, a subsequent holder, although they themselves have
not notified P.
The notice to A inures to the benefit of B, C and E; the notice to B, to the
benefit of C and E. Therefore, should B, for example, pay C, B may go against
P or A on the basis of the notice given to P or A although B has not himself
given notice of dishonor.
But the notice to A does not operate in favor of P because P has no right of
recourse against A. It is A who can hold P liable.
Sec. 93. Effect where notice is given by party entitled thereto.
Notice of dishonor given by or on behalf of the party entitled to give notice
inures to the benefit of:
1. The holder; and
2. All parties subsequent to the party to whom notice is given including
parties subsequent to the holder who gave notice.
Example:
In the preceding example, if D notifies only C, then P, A, and B are
discharged from their liability for lack of notice. The notice to C makes him a
party entitled to give notice as he might be compelled to pay it to the
holder, and who, upon taking it up, would have a right to reimbursement
from the party to whom notice is given.
If C, however, within the time fixed by law, gives due notice to P, A, and B,
such notice inures to the benefit of D, the holder and also of E as he is also a
party subsequent to the party to whom notice was given. Cs notice to P
inures to the benefit of A, B, D, and E, parties subsequent to P, although they
themselves did not give notice to P.
For the same reason, Cs notice to A inures to the benefit of B, D, and E, etc.
Thus, A is not discharged by the failure of D to give him notice if A is notified
properly by a person entitled to give notice like C.
Sec. 94. When agent may give notice.
Where the instrument has been dishonored in the hands of an agent, he may
either (1) himself give notice to the parties liable thereon, or (2) he may
give notice to the principal.

If he chooses to give notice to his principal he must notify the latter

within the same time referred to as if he were a holder. The principal, upon
receiving such notice, has also the same time for giving notice to the parties
secondarily liable as if the instrument was dishonored on the day that he
received the notice.
If the agent gives notice directly to the parties secondarily liable
he must do so within the time fixed by Secs. 102, 103, 104, and 107;
otherwise, they are discharged for lack of notice, unless of course the
principal himself notifies them within the same time. (example page 302)
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 thru the mails.
Whether oral or written, the notice must set forth: IFS
1. The Identity of the instrument;
2. The Fact that it has been dishonored by non-acceptance or nonpayment; and
3. A Statement that the party giving notice intends to look to the party
addressed for payment.
Sec. 97. To whom notice may be given.
Notice of dishonor may be given either to the (1) party himself or (2) to his
agent in that behalf (agent authorized to receive notice).
Under Sec. 91 the agent giving the notice of dishonor need not be
authorized by the principal. The giving of notice benefits the principal.
Under Sec. 97 an agent to be competent to receive notice of dishonor
must be authorized. The receipt of notice creates liability.
Sec. 98. Notice where party is dead.
When the party sought to be charged is dead, the notice must be given to
his personal representative provided that: DPR
1. His Death is known to the party giving notice;

2.
3.

There is a Personal representative; and

If with Reasonable diligence the said personal representative could
be found.

In the following cases, there is no duty to give notice to the personal

representative: DPC
1. If the Death is not known to the party giving the notice; or
2. Although the fact of death is known, the decedent has no Personal
representative; or
3. If there be one, but with reasonable diligence, he Cannot be found.
In any of the above situations, notice may be sent to the last residence or
last place of business of the deceased.
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 parties who are not partners must be given to each of them,
unless one of them has authority to receive such notice for the others.
Sec. 100 does not refer to joint payees or joint indorsees mentioned in
Section 68. Since joint accommodation indorsers are neither payees nor
indorsees, they are not solidarily liable under Section 68 and they may be
governed by Section 100. Hence, notice must be given to each one of the
joint accommodation indorsers unless: (1) they are partners; or (2) one of
them has authority to receive such notice from the others.
Sec. 101. Notice to bankrupt.
Where a party has been (1) adjudged a bankrupt or an insolvent, or (2) has
made an assignment for the benefit of creditors, notice may be given either
to (1) the party or (2) to his trustee or assignee.
From the moment the notice of honor is duly served, the liability of the
secondary party is fixed. However, it is necessary for the holder to file his
claims in the insolvency proceedings and to prove the giving of due notice of
dishonor before he can enforce his rights against said party.
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 herein provided, must be given within the times fixed by
this Act.

Sec. 103. Where the 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:
1. 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.
2. If given at his residence, it must be given before the usual hours of
rest on the day following.
3. If sent by mail, it must be deposited in the post office in time to
reach him in usual course on the day following.
This section provides 2 means of giving notice of dishonor: personally and by
mail. The place where the notice may be given is either the place of business
or the residence of the party to receive the notice, at the option of the party
giving the notice.
Where the time for giving notice falls on a Sunday or a holiday, the act may
be done on the next succeeding business day.
It has been held that a notice placed in a mail on the day of protest but not
postmarked until the next day at noon, is mailed in time and it will be
presumed, in the absence of any contrary evidence, that the notice reached
its destination on the day following before the close of business hours.
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:
1. If sent by mail, it must be deposited in the post office in time to go
by mail the day following the day of the dishonor, or if there be no
mail at a convenient hour on that day, by the next mail thereafter.
2. If given otherwise that through the post office, then 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.
Example:
1. By mail H, holder, resides in Manila and R, drawer (or indorser),
resides in Olongapo City. The instrument is dishonored on October
10, 2013.
If the notice is given by mail, it need not reach R on October 11,
2013, but it must be deposited in the mails not later than October
11, 2013, so as to go by mail on October 11, 2013, the day following
the day of dishonor.

If there is no mail on October 11, 2013 or if there is, but it leaves at

an inconvenient hour, say, 4AM and the next maul is 5PM on October
12, 2013, the notice must be deposited in time for it to go by the
5PM mail on October 12, 2013.
2.

Otherwise than by mail if H fails to deposit the written notice in the

mails on time, the same may still be given in some other way as by
personal messenger. What is important is that R should receive the
notice not later than the time he would have received it had it been
mailed.
Suppose that the notice would have been received by R on October
14, 2013 had it been mailed to him under paragraph (a) of Section
104. If notice is given by personal messenger after October 14, 2013,
the notice is inoperative and R is 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.
Notice by mail is deemed to have been properly made where: (a) the notice
of dishonor is duly addressed; and (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 burden of proof rests upon the plaintiff to show a compliance with the
statutory provisions in order to hold the indorser/drawer as the liability of the
indorser depends entirely upon compliance as to notice.
Sec. 106. Deposit in the 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.
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.

The instrument is considered dishonored in the hands of a party who

receives a notice of dishonor from the holder on the date he receives such
notice, not on the date the instrument is dishonored in the hands of the
holder.
Example:
P, A, B, and C are indorsers and D is the holder. All of them reside in the
same place.
If the instrument is dishonored on October 10, D may notify any of or all the
indorsers prior to him. D must give notice not later than the next day,
October 11.
Assuming D notifies only C on October 11, C upon receipt of the notice of
dishonor from D may, in turn, notify any or all of the antecedent parties not
later than October 12. However, if D immediately notifies C on October 10, C
mist give notice to antecedent parties not later than October 11. C cannot
take an extra day to notify P, A, and/or B.
If they reside in different places, the notice must be given within the time
provided for in Section 104.
Sec. 110. Whom affected by waiver.
As to who are affected by an express waiver depends on where the waiver is
written:
1. If the waiver is embodied in the instrument itself, that is, it appears
in the body or on the face of the instrument, it binds all parties.
2. If it 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.
Protest the formal instrument executed usually by a notary public
certifying that the legal steps necessary to fix the liability of the drawee and
the indorsers have been taken.
Where presentment for payment is waived, notice of dishonor is also waived,
but the waiver of the latter does not include the waiver or the former.
Sec. 112. When notice is dispensed with.
Notice of dishonor is dispensed with when, after the exercise of reasonable
diligence, it cannot be given or does not reach the parties sought to be
charged.

Reasonable diligence implies active search.

Sec. 113. Delay in giving notice of dishonor; 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:
1. When the drawer and drawee are the same person.
2. Where the drawee is a fictitious person or a person not having
capacity to contract.
3. Where the drawer is the person to whom the instrument is presented
for payment.
4. Where the drawer has no right to expect or require that the drawee
or acceptor will honor the instrument.
5. Where the drawer has countermanded payment. (stop payment
order)
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:
1. When the 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.
2. Where the indorser is the person to whom the instrument is
presented for payment.
3. Where the instrument was made or accepted for his accommodation.
Example:
A bill drawn by R on W and payable on July 30, 2010 is indorsed successively
by P, A, and B. C, the holder, presents the bill for acceptance on July 10,
2010 to W who refuses to accept the bill.
Under section 151, after C gives his notice of dishonor to R, the drawer, and
P, A, and B, the indorsers, he may enforce his right against them without the
necessity of presentment for payment. If C presents the bill to W on maturity

and it is dishonored, notice of the subsequent dishonor by non-payment is

not necessary.
But suppose W later changes his mind and accepts the bill on July 20, 2010.
C must present the bill for payment to W on July 30, 2010 and if W refuses to
pay, C must give notice of dishonor by non-payment to R, the drawer, and P,
A, and B, the indorsers. The act of notice will discharge them from liability.
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.
The failure of the previous holder to give a notice of dishonor by nonacceptance 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.
Example:
R drew a bill against W in favor of P. The bill is payable on October 30, 2013.
P presents the bill for acceptance to W who refuses to accept the same. P
fails to give notice of dishonor by non-acceptance to R within the time
prescribed in Section 103 or 104. The effect of the lack of notice is to
discharge R from liability.
Before maturity, P indorses the instrument to A, a holder in due course. As to
A, R is not discharged because A cannot be prejudiced by the omission of P
to give R notice of dishonor by non-acceptance and in case W refuses to
accept it, A may notify R and P and hold them liable on their secondary
liability.

Where any negotiable instrument has been dishonored it may be protested

for non-acceptance or non-payment, as the case may be; but protest is not
required except in the case of foreign bills of exchange.
Formal protest of a promissory note by a notary public is not essential to
hold an indorser. What is essential is 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.
It is, however, advantageous to protest these instruments also when
dishonored since the holder obtains a most convenient record evidencing the
fact of dishonor.
Summary of rules as to notice:
1. Like presentment for payment, notice of dishonor is not necessary to
charge persons primarily liable but is necessary to charge persons
secondarily liable; and
2. In the following cases, notice of dishonor is not necessary to charge
persons secondarily liable:
a. When notice is waived under Section 109;
b. When protest is waived under Section 111;
c. When notice is dispensed with under Section 112;
d. As to the drawer under Section 114;
e. As to an indorser under Section 115;
f. Where due notice of dishonor by non-acceptance has been given
under Section 116; and
g. As to a holder in due course, without notice of dishonor by nonacceptance, subsequent to the omission to give notice under
Section 117.

Sec. 118. When protest need not be made; when must be made.