59.

Presentment not

required to charge the

a.

after due diligence,

64. How dishonored by non-

presentment cannot be made

acceptance:

b.

presentment is waived

c.

the drawee is a fictitious

drawer:
1.

he has no right to

presented but payment is

expect
2.

he has no right to
require

the instrument was duly

refused or cannot be obtained

person (Sec 82 NIL)

Notes on Section 82

that the drawee or acceptor will

pay (Sec 79 NIL)
60.

Presentment not

what is excused is the

presentment is excused

and the instrument is overdue

and unpaid (Sec. 83 NIL)

failure to make presentment.

required to charge the

There is no need to make any

indorser where:

presentment versus under

65. Effects of dishonor by non-

section 81 (delay in

payment:

1.

2.

the instrument was

made or accepted for his

presentment) presentment for

accommodation

payment is still required after

the cause of delay has ceased.

recourse to all parties

he has no reason to

an immediate right of

expect that the

secondarily liable accrues to the

instrument will be paid if

holder. (Sec. 84 NIL)

presented (Sec. 80 NIL)

63. Summary of rules as to

Notes on Section 84

presentment for payment:

1.

61. General rule: Presentment

presentment not

for payment necessary to

necessary to charge

charge persons secondarily

persons primarily liable

2.

liable otherwise they are

necessary to charge

parties cease to be

secondarily liable and become

principal debtors.

Liability becomes the

persons secondarily

same as that of the original

liable except:

obligors.

the drawer under Sec. 79

66.

theindorser under Sec.

discharged:
Exception:

Section 79 and 80
Notes on Section 79 and 80

only the drawer or

indorser are not discharged. All

when excused under

Sec. 82

when the instrument has

been dishonored by non62.

Presentment for

payment excused if:

1.

made at or after the

maturity of the

other parties secondarily liable

are discharged.

in due course:

80

Requisites for payment

acceptance under Sec. 83

instrument
2.

to the holder

3.

in good faith

4.

without notice of any

defect in the holders
title (sec. 88 NIL)
Notes on Section 88

payment must be made

Effects:

72.

to the possessor of the

instrument

Instances when Notice

of Dishonor Not Necessary

deemed a waiver of

to Drawer

presentment and notice of

possession of the note

dishonor as well (Sec. 111 NIL)

by the maker is presumptive

a.

person
Notes on Section 111

evidence that it has been paid

b.
67.

Notice of Dishonor may

be given:
1.

by or on behalf or the
holder

2.

by or on behalf of any
party who:

is a party to the

instrument and might be

compelled to pay the instrument

drawer and drawee same

Where notice is waived,

drawee is a

fictitious/incapacitated person

presentment is not waived

c.

Where presentment is

drawer is the person to

whom presentment for payment

waived, notice is also waived

is made

d.

Where protest is waived,

drawer has no right to

notice and presentment is

expect that the drawee will

waived

accept/pay the instrument (Sec.

71. Notice of Dishonor

114 NIL)

given by the holder to the

73.

taken it up would have a right of

parties secondarily liable,

Not Required to Indorser

reimbursement from the party

drawer and each indorser, that

to whom notice is given. (Sec.

the instrument was dishonored

a.

90 NIL)

by non-acceptance or non-

fictitious/incapacitated person

payment by the drawee/maker

and the indorser was aware of

to a holder who having

68.
1.

Notice:
may be written or oral
(Sec. 96)

2.

written notice need not

such at the time of indorsement

indorser to whom such notice is

b.

not given is discharged.

whom instrument was presented

may be by personal
delivery or by mail (Sec.

for payment
c.
1.

Waiver (Sec. 109)

2.

Notice is dispensed
(Sec. 112)

96)
69.

Notice may be waived

either expressly or implied:

1.

before the time of

giving notice has arrived

2.

after the omission to

give due notice (Sec.
109 NIL)

70.

Protest may be waived:

indorser is the person to

Exceptions:

communication (Sec. 95)

3.

drawee was a

General rule: Any drawer or

be signed or may be
supplemented by verbal

Instances when Notice

3.

Not necessary to
Drawer (Sec. 114)

4.

Not necessary to
Indorser (Sec. 115)

if notice is delayed, delay may

be excused (Sec. 113)

instrument

made/accepted for his

accommodation (Sec. 115 NIL)
74. Omission to give notice of
dishonor by non-acceptance doe
not prejudice a HDC (Sec. 117
NIL)
75. Protest only necessary for a
foreign bill of exchange. Protest

for other negotiable instruments

a.

any act discharging the

is optional. (Sec. 118 NIL)

instrument

76.

b.

and instrument cannot

be renegotiated where is was

made or accepted for

Causes of Discharge of

cancellation of indorsers

the Instrument

signature by indorsers

a.

payment by the debtor

c.

discharge of prior party

b.

payment by

d.

tender of payment by

accommodated party

prior party

c.

e.

intentional cancellation by

accommodation and it has been

paid by the party
accommodated.
78. Renunciation by a holder
discharges an instrument
when:
1.

release of principal debtor

unconditional

holder of instrument
f.
d.

any other act discharging

a simple monetary obligation

2.

extension of payment by

debtor becomes holder of

3.

right to enforce without assent

recourse against secondary

in his own right ( Sec 119 NIL)

parties (Sec 120 NIL)

Notes on Section 119

discharge of the

78.

discharge

the instrument is not

the party is remitted to

course, and by the principal

his former rights as to all prior

debtor or on his behalf

parties

if payment is not made

the party may strike out

his own and all subsequent

payment only cancels the

indorsements

liability of the payor and those

obligated after him but does not

the party may negotiate

discharge the instrument.

the instrument again

Exception:

accommodation party does not

discharge the instrument.

77.

Discharge of Secondary

Parties:

up to the person
primarily liable (Sec. 122
NIL)
Notes on Section 122

if renounced in favor of a

party secondarily liable, only he

is exonerated from liability and
all parties subsequent to him
discharge by novation is

allowed
79. General rule: When
materially altered, without the
consent of all parties liable, the
instrument is avoided except as
against:
1.

to order of a 3rd person and has

been paid by the drawer

the party who has

made the alteration

an instrument cannot be

renegotiated where it is payable

in writing or the
instrument is delivered

by the principal debtor,

payment by an

4.

secondarily liable who pays:

parties thereto
payment must be in due

instrument

Rights of a party

instrument discharges all the

made at or after
maturity of the

without reservation of right of

the instrument at/after maturity

made in favor of a
person primarily liable

the holder/postponement of

of secondary parties and

e.

it is absolute and

2.

the party who

authorized or assented
to the alteration.

3.

subsequent indorsers

material if it alters the effect

6.

of the instrument.
Exception:

is specified
Under Section 125 the following

if in the hands of a HDC,

may be enforced according to

alterations:

instrument
81.

1.

dates

2.

the sum payable

3.

time and place of

4.

alternation is said to be

1.

medium or currency for

payment

where the drawer and

the drawee are one and
the same

2.

the parties
5.

Material Alteration an

number or relations of

Instances where a BOE

may be treated as a PN:

payment

innocent alteration
80.

any other which alters

changes are considered material

there is no distinction

between fraudulent and

7.

the affect of the

its original tenor

Notes on Section 124

adding a place of
payment where no place

where the drawee is a

fictitious person

3.

where the drawee has

no capacity to contract

(Sec. 130 NIL)

The holder has the option to
treat it as a BOE or a PN