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B.
SECONDARY PARTY
1. Indorsers of Note and Bill
2. Drawer of a Bill
C.
D.
LIABILITY OF ACCEPTOR
A. CONSTRUCTIVE ACCEPTANCE
a) Time Allowed for Drawee to Accept - 24 HOURS after presentment
b) Liability of Drawee Retaining/ Destroying Bill:
Destroy or Refuses within 24 hrs after delivery to return the bill accepted/ not
accepted to the holder, he will be deemed to have ACCEPTED.
Otherwise, he
Person
loses right of
presenting
recourse
must treat the
against
bill as
Drawer and
dishonored by
Indorser
nonacceptance
**Drawee has 24 hours to accept / not / to decide counted from
DELIVERY.
Bill is duly
presented for
acceptance but
not accepted
w/in prescribed
period
C. KINDS OF ACCEPTANCE
1. General Acceptance
2. Qualified Acceptance
3. Trade Acceptance
4. Bankers Acceptance
GENERAL
General assents without
qualification to
the order of the
drawer
QUALIFIED
QualifiedIn express terms,
varies the effect of the
bill as drawn
An acceptance to
pay at a particular
place is a general
acceptance
unless it
expressly states
that the bill is to
be paid there only
and not
elsewhere
TRADE
Is a draft or bill of
exchange with a
definite maturity
drawn by a seller
on a buyer for the
purchase price of
goods, bearing
across its face the
acceptance of
buyer
Trade
acceptance is
confined to sale of
goods and has a
fixed date of
maturity while an
ordinary bill may
cover any kind of
transaction and
BANKERS
Is a negotiable
time draft or bills
of exchange
drawn on and
accepted by a
commercial bank.
particular place
(d) Qualifiedas to time
(e) As to Drawee - one
or more but not all
may be payable on
demand or at a
fixed or
determinable
future time.
CHECKS
Check - is a bill of exchange drawn on a bank payable on demand.
Requisites:
1. Must contain an order
2. Must be unconditional
3. Order must be for payment of money
4. The amount must be definite and certain
5. May be transferred by indorsement or delivery (depending if order/bearer)
6. Always payable on demand not at future date
Kinds of Checks:
Cashiers or Managers
Check
one which is drawn by
the bank on itself, and its
issuance has the effect of
acceptance.
Memorandum Check
Travelers Check
a negotiable instrument
upon which the holders
signature must appear
twice on the instrument:
First when it is issued and
again when it is cashed.
**Bank may be liable for damages in favor of drawer for refusal to pay.
The acceptance of an ordinary bill even Where the check is certified at the
if given at the request of the holder request of the holder, the bank
does not release the secondary parties becomes solitary debtor and the drawer
who remain liable should the acceptor and indorsers are discharged.
fail to pay.
Where certification is obtained at the request of the drawer, secondary parties
are not released. Personal defenses of drawer against the payee would be
available to the certifying bank against all holders not in due course
But if certification was obtained by the holder, a personal defense of the drawer
against the payee would not be available to the bank even against holder in due
course.
A STOP ORDER
given by the drawer
where check was
certified at the
request of holder is
INOPERATIVE.
Where Certification
was obtained by the
drawer, any stop
order later issued by
him is effective in
preventing bank
from paying check.