Rights of the Holder 1.

Meaning of Holder

Sec. 191. xxx xxx xxx. "Holder" means the payee or indorsee of a bill or note who is in possession of it, or the bearer thereof; xxx xxx xxx. 2. Kinds of Holder: Holder in due course and holder not in due course a. Holder in due course (1) What constitutes a holder in due course Sec. 52. What constitutes a holder in due course. - A holder in due course is a holder who has taken the instrument under the following conditions: (a) That it is complete and regular upon its face; (b) That he became the holder of it before it was overdue, and without notice that it has been previously dishonored, if such was the fact; (c) That he took it in good faith and for value; (d) That at the time it was negotiated to him, he had no notice of any infirmity in the instrument or defect in the title of the person negotiating it. All the conditions set forth in Sec. 52 must concur. Every holder is generally deemed prima facie a HIDC (Sec. 59). He who claims otherwise has the burden of proof. The holder of a non-negotiable instrument cannot attain the status of a HIDC. He is a mere assignee subject to defences, acquiring no better rights under the contract than those possessed by the assignor. The fact that the instrument is non-negotiable is a sign of warning to the prospective purchaser and places him on his guard and on inquiry. A transferee who receives an instrument other than by issue or negotiation (Sec. 30. What constitutes negotiation. - An instrument is negotiated when it is transferred from one person to another in such manner as to constitute the transferee the holder thereof. If payable to bearer, it is negotiated by delivery; if payable to order, it is negotiated by the indorsement of the holder and completed by delivery.) cannot acquire the status of a HIDC regardless of the other circumstances under which his acquisition of the instrument took place. Rights of holder, in dues course and not in due coursea holder who is not a holder in due course has all the rights of the latter except that the instrument is subject to every available defense as if it were non-negotiable (Sec. 58. When subject to original defense. - In the hands of any holder other than a holder in due course, a negotiable instrument is subject to the same defenses as if it were nonnegotiable. But a holder who derives his title through a holder in due course, and who is not himself a party to any fraud or illegality affecting the instrument, has all the rights of such former holder in respect of all parties prior to the latter.). on the other hand, a HIDC, is afforded most-favored status under the law. He takes the instrument free of many defences that exist between the original parties. Thus, it is possible for a HIDC to greater rights under a negotiable instrument possessed by the payee/indorser. Wanting in any material particularan instrument is incomplete when it is wanting in any material particular or particular proper to be inserted in a negotiable instrument without which the same will not be complete. The taking of an incomplete instrument puts the purchaser on inquiry as to why it is incomplete. If he fails to do so, he takes the instrument subject to all defences. Alteration apparent on face of instrumentthe instrument must also be regular upon its face. The most common type of irregularity is an alteration in the instrument. To render the instrument irregular under Sec. 52 (a), the alteration must be visible or apparent on the face of the instrument, for if it is not apparent, the matter is governed solely by Sec. 124 which renders the instrument void. Holder before instrument is overdue. Date of maturityan instrument is overdue after the date of maturity. a. The date of maturity is the time fixed therein. b. If the instrument is payable on demand, the date of maturity is determined by the date of presentment. c. If the instrument is payable on the occurrence of a specified event which is certain to happen, the date of maturity is fixed by the happening of the event. Acquisition of instrument after/on date of maturitya negotiable instrument in circulation past its maturity date carries strong indication that it has been dishonoured. But one taking an instrument on the date of maturity takes before maturity because the principal debtor has the whole day to pay. Hence, it cannot be considered as notice that the instrument has been dishonoured. Holder without notice of dishonor. 1. Ways and time of dishonoran instrument may be dishonoured either by non-acceptance or by non-payment. Dishonor by non-acceptance refers only to a bill of exchange. While dishonor by non-payment can only take place at the time of maturity, dishonor by non-acceptance of bill may occur even before the date of its maturity. 2. Negotiation after maturity or dishonoran overdue or dishonoured instrument may still be negotiated either by indorsement or by delivery to the same extent as before maturity but in the case of the former, the holder cannot be a HIDC, while in the case of the latter, the holder without notice can be a HIDC.

The words in good faith refer only to the good faith of the indorsee or transferee and not to the seller of the paper. It means honesty in fact in the transaction concerned. Each situation must be examined separately to determined good faith. The negative test is that a holder acted with good faith if bad faith is not present. In any case, the test of good faith is subjective. Bad faith means that he must have knowledge of facts which render it dishonest for him to take a particular piece of negotiable paper. To show knowledge of such facts that the taking would amount to bad faith, it is not necessary to show knowledge of the exact truth. It is sufficient that such knowledge tends to show there was something wrong with the transaction. Holder for value. Any consideration sufficient to support a simple contract is value. It is not necessary that the consideration should be adequate (love and affection not included). Thus, the purchase of an instrument at a discount does not necessarily prevent one from being a bona fide holder especially if the financial condition of the issuer of the instrument is not well-known. However, where the discount is unusually large, this fact together with other facts, may be material on the question of good faith. Notice that the intrsument has been dishonoured or any defense against the instrument after instrument has been acquired does not prevent a holder from qualifying as a HIDC. Bad faith of an agenyknowledge of an agent acting within the scope of his authority is a constructive knowledge of the principal, i.e. the agents knowledge is legally deemed his principals knowledge, and thus, will render the principal not a holder in due course. CASE NO. 60: DE OCAMPO VS GATCHALIAN (3 SCRA 596) CASE NO. 61: MESINA VS IAC (145 SCRA 497) AND CASE NO. 9 A) Notice before full amount paid Sec. 54. Notice before full amount is paid. - Where the transferee receives notice of any infirmity in the instrument or defect in the title of the person negotiating the same before he has paid the full amount agreed to be paid therefor, he will be deemed a holder in due course only to the extent of the amount therefore paid by him. Effect of Notice before full payment 1. No amount has yet been paidwhere an instrument has been taken but the purchaser has not yet paid anything, and he receives notice of infirmity in the instrument or defect in the title of the holder, he is relieved from the obligation to make payment. If he does so, it is quite clear that he is not entitled to the same protection as a HIDC. 2. An amount has been paidwhere the instrument has been transferred to him in consideration of his promise to make future payments to his transferor, he is under no legal obligation to pay the balance of the amount he has agreed to pay on discovering the infirmity or defect. If he does, he can be considered a HIDC only to the extent of the amount theretofore paid by him. B) When title is defective Sec. 55. When title defective. - The title of a person who negotiates an instrument is defective within the meaning of this Act when he obtained the instrument, or any signature thereto, by fraud, duress, or force and fear, or other unlawful means, or for an illegal consideration, or when he negotiates it in breach of faith, or under such circumstances as amount to a fraud. Defective in: a. acquisition; or b. negotiation. Under the first means, when he obtained the instrument or any signature thereto by fraud, duress or force and fear or other lawful means or for an illegal consideration. Under the second means, when he negotiates the instrument in bad faith, or under such circumstances as amount to a fraud. Duress, or force and fear include all acts which overcome the signers will. C) What constitutes notice of defect Sec. 56. What constitutes notice of defect. - To constitutes notice of an infirmity in the instrument or defect in the title of the person negotiating the same, the person to whom it is negotiated must have had actual knowledge of the infirmity or defect, or knowledge of such facts that his action in taking the instrument amounted to bad faith. In order to constitute notice, the transferee must have actual knowledge of the infirmity or defect; or knowledge of such facts (which do not appear on the instrument) that his action in taking the instrument amounts to bad faith. Actual knowledge is usually shown by the instrument itself. Mere negligence to make inquiries insufficientunder Sec. 54 and 56, negligence in itself is not sufficient to constitute notice since it is not equivalent of either actual knowledge or bad faith. The question of bad faith or good faith is mostly a question of fact. Mere suspicious circumstances are not enough. Thus, consulting an

attorney before taking a note does not show bad faith. Nor does the fact that the payee indorses without recourse constitute a badge of guilty knowledge. Knowledge amounting to bad faiththere is difference, however, between the existence of suspicious circumstances, on the one hand, and actual suspicion of the holder on the other. If the holder had actual knowledge of suspicious circumstances, coupled with the means of readily informing himself of the facts and he wilfully abstained from making inquiries, his intentional ignorance may amount to bad faith. Effect of notice of defectknowledge or chargeable notice of any defect, at the time of taking of an instrument, which destroys the status of a holder as a HIDC, opens all defences otherwise cut off against him and not merely that relating to the defect of which he had notice. Thus, a holder with knowledge of failure of consideration is subject to the defense that a note was obtained by fraud. Case No. 62: Asia Banking vs. Ten Sen Guan (44 Phil 511) (e) Who is deemed holder in due course Sec. 59. Who is deemed holder in due course. - Every holder is deemed prima facie to be a holder in due course; but when it is shown that the title of any person who has negotiated the instrument was defective, the burden is on the holder to prove that he or some person under whom he claims acquired the title as holder in due course. But the last-mentioned rule does not apply in favor of a party who became bound on the instrument prior to the acquisition of such defective title. The presumption expressed to the effect that every holder is deemed prima facie to be a HIDC arises only in favour of a person who is holder in the sense defined in Sec. 191, that is, a payee or indorsee who is in possession of the instrument or the bearer thereof. Proof of being a holderonce the person through whose hands an instrument has passed shows that he is a holder, the presumption accrues in his favour. He does not have to prove that he satisfies the requirements of a HIDC in Sec. 52. Burden of proof on holder where indorsers title is defectivewhen it is shown that the title of any person who has negotiated the instrument was defective, as when the instrument is not payable to him or to bearer, then the burden of proof shifts to the holder who must show that he is a HIDC or that he acquired his title from a HIDC although he is not himself a HIDC. Exceptionthe law, however, establishes an exception to the second mentioned rule, i.e. the holder has no burden of proving that he is a HIDC in favour of a party who became bound on the instrument prior to the acquisition of such defective title. In other words, in this case we revert to the presumption that the holder is a HIDC. Case no. 63: Fossum vs Fernandez (44 Phil 713) (f) Rights of a Holder in Due Course Sec. 51. Right of holder to sue; payment. - The holder of a negotiable instrument may to sue thereon in his own name; and payment to him in due course discharges the instrument. Rights of holder in general 1. He may sue on the instrument in his name; and 2. He may receive payment and if the payment is in due course ( Sec. 88. What constitutes payment in due course. - Payment is made in due course when it is made at or after the maturity of the payment to the holder thereof in good faith and without notice that his title is defective.), the instrument is discharged. Under this section, a holder even though he be a holder only for collection may sue in his own name. similarly, the pledgee of a note may sue as he is a deemed holder within this section. Sec. 57. Rights of holder in due course. - 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, and may enforce payment of the instrument for the full amount thereof against all parties liable thereon. The ff are the rights of HIDC in addition to the two mentioned in Sec. 51: a. He holds the instrument free from any defect of title of prior parties; b. He holds the instrument free from defences available to prior parties among themselves; and c. He may enforce payment of the instrument for the full amount thereof against all parties liable thereon. The defenses referred to in Sec. 57 that cannot be set up against a HIDC are the so called personal defences. They are cut off by negotiation of the instrument to a HIDC. nd (g) Derivative holder in due course (Sec. 58, 2 sentence) Sec. 58. When subject to original defense. - In the hands of any holder other than a holder in due course, a negotiable instrument is subject to the same defenses as if it were nonnegotiable. But a holder who derives his title through a holder in due course, and who is not himself a party to any fraud or illegality affecting the instrument, has all the rights of such former holder in respect of all parties prior to the latter.

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A holder who derives his title from a HIDC can still enjoy the special rights of the latter even though he himself is a mere transferee. Such holder is called a holder through a HIDC. This rule has a logical basis: if a third party cannot take commercial paper from an innocent holder free from equitable defences becoz such third party knows of its original infirmities, then the rights of the innocent holder are greatly reduced. His market for such paper would be limited to those who, like himself, had no notice of its original infirmities. Since the innocent holder could collect from the maker, it can make no difference to the maker into whose hands the note may pass. Two requisites: 1) that he derives his title through a HIDC; and 2) that he was not himself a party to any fraud or illegality affecting the instrument. But a payee or indorsee whose title is defective cannot better it by selling the instrument to a holder in due course and buying it again. b. Holder not in due course (1) When person not deemed holder in due course Sec. 53. When person not deemed holder in due course. - Where an instrument payable on demand is negotiated on an unreasonable length of time after its issue, the holder is not deemed a holder in due course. One of the requisites of due course holding is that the holder of the instrument became such before it is overdue (sec. 52 (b)). It obviously applies to an instrument payable at a fixed determinable future time. With respect to instruments payable on demand, Sec. 53 governs in determining whether the purchase is one of an overdue instrument. As to what constitutes a reasonable time, the law provides that: regard is to be had to the nature of the instrument, the usage of trade or business with respect to such instruments, and the facts of the particular case. Case. No. 64: Montinola vs PNB (88 Phil 178) (2) Rights of a holder not in due course Sec. 51. Right of holder to sue; payment. - The holder of a negotiable instrument may to sue thereon in his own name; and payment to him in due course discharges the instrument. Sec. 53. When person not deemed holder in due course. - Where an instrument payable on demand is negotiated on an unreasonable length of time after its issue, the holder is not deemed a holder in due course. Situational Rights of a holder a. Right to insert true date of issue: Sec. 13. When date may be inserted. - Where an instrument expressed to be payable at a fixed period after date is issue undated, or where the acceptance of an instrument payable at a fixed period after sight is undated, any holder may insert therein the true date of issue or acceptance, and the instrument shall be payable accordingly. The insertion of a wrong date does not avoid the instrument in the hands of a subsequent holder in due course; but as to him, the date so inserted is to be regarded as the true date. b. Right to insert true date of acceptance (ibid.) c. Right to complete an incomplete instrument Sec. 14. Blanks; when may be filled. - Where the instrument is wanting in any material particular, the person in possession thereof has a prima facie authority to complete it by filling up the blanks therein. And a signature on a blank paper delivered by the person making the signature in order that the paper may be converted into a negotiable instrument operates as a prima facie authority to fill it up as such for any amount. In order, however, that any such instrument when completed may be enforced against any person who became a party thereto prior to its completion, it must be filled up strictly in accordance with the authority given and within a reasonable time. But if any such instrument, after completion, is negotiated to a holder in due course, it is valid and effectual for all purposes in his hands, and he may enforce it as if it had been filled up strictly in accordance with the authority given and within a reasonable time. d. Right to treat an ambiguous instrument as either a bill or note Sec. 17 (e). Sec. 130. When bill may be treated as promissory note. - Where in a bill the drawer and drawee are the same person or where the drawee is a fictitious person or a person not having capacity to contract, the holder may treat the instrument at his option either as a bill of exchange or as a promissory note. When bill may be treated as a note: 1. The drawer and drawee are the same person, like a draft drawn by a bank on its branch, or by a corporation, or by an agent on his principal authority of the latter; 2. The drawee is a fictitious person; and 3. The drawee has no capacity to contract. Where a person is the drawer and the drawee at the same time of a bill, he is practically ordering himself to pay. Treating the bill as a note would constitute the drawer the maker and, therefore, his liability is not secondary but primary. Where the drawee is a fictitious person, there is nobody who could accept the bill; and where he has no

e. f.

g.

h.

i.

capacity to contract, his acceptance would not be valid. Acceptance is thus made impossible thoruhg the fault of the drawer. Hence, the holder may treat the bill at his option as a promissory note. Right to sign in trade name or assumed name (Sec. 18. ) Right to convert a blank indorsement into a special one Sec. 35. Blank indorsement; how changed to special indorsement. - The holder may convert a blank indorsement into a special indorsement by writing over the signature of the indorser in blank any contract consistent with the character of the indorsement. The holder of an instrument indorsed in blank or one which specifies no indorsee may convert it into a special indorsement by writing over the signature of the indorser the person to whom, or to whose order, the instrument is to be payable. A special indorsement or an inodorsement in blank does not destroy the negotiability of the instrument. Right to strike out any indorsement not necessary to his title Sec. 48. Striking out indorsement. - The holder may at any time strike out any indorsement which is not necessary to his title. The indorser whose indorsement is struck out, and all indorsers subsequent to him, are thereby relieved from liability on the instrument. The act of striking out benefits the indorsee whose indorsement has been stricken and all indorsers subsequent to him, with no apparent benefit to the striking indorsee, for if the instrument is not paid or is dishonoured, the striking indorsee cannot hold liable those indorsees who have been relieved of liability on the instrument. Right to give 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 to each indorser, and any drawer or indorser to whom such notice is not given is discharged. Notice of dishonor is bringing, either verbally or by writing, to the knowledge of the drawer or the indorser of an instrument, the fact that a specified nego instrument, upon proper proceedings taken, has not been taken or has not been paid and that the party notified is expected to pay it. Under BP 22, the notice of dishonor must be in writing. Verbal notice is ineffective. Lack of notice of dishonor releases the drawer or indorser from liability on the instrument. This makes that notice of dishonor a condition precedent for any cause of action against the drawer or indorser to accrue. Right of discharge instrument by intentional cancellation thereof. Sec. 119. Instrument; how discharged. - A negotiable instrument is discharged: (a) By payment in due course by or on behalf of the principal debtor; (b) By payment in due course by the party accommodated, where the instrument is made or accepted for his accommodation; (c) By the intentional cancellation thereof by the holder; (d) By any other act which will discharge a simple contract for the payment of money; (e) When the principal debtor becomes the holder of the instrument at or after maturity in his own right. -- Discharge of an instrument means a release of all parties, whether primary or secondary, from the obligations arising under the instrument rendering it without force and effect, and, consequently, no longer negotiable. -- The methods for the discharge are exclusive: 1. Payment by principal debtorin order that payment may produce the effect of discharging the instrument under subsection (a), it must be made: (1) by or on behalf of the principal debtor; (2) at or after its maturity; (3) to the holder thereof; (4) in good faith and without notice that the holders title is defective. Hence, payment by a stranger will not discharge the instrument unless the payment is for the debtor. It must be remembered that the holder is not bound to accept payment by check or other nego instrument becoz it does not meet the requirements of a legal tender. 2.Payment by accommodated partyas between the accommodation party and the accommodated party, the latter is the real debtor. Hence, payment by the accommodated party is actually payment by the principal debtor and this is true whether he appears as a party to the instrument or not. 3.Intentional cancellation of the instrument by the holderto effect a discharge of the instrument, the cancellation must: (1) be intentionally done; (2) by the holder thereof. Cancellation may be done by writing the word cancelled or paid on the face of the instrument. There is also cancellation when the instrument is torn up, burned or mutilated. The presumption is that the cancellation is intentional. 4. any act which discharges the contractas the law on obligations and contracts provide: (1) by payment or performance; (2) by loss of the thing due; (3) by the condonation or remission of the debt; (4) by the confusion or merger of the rights of creditor and debtor; (5) by compensation; (6) novation. 5. Reacquisition by principal debtor in his own rightin order that there will ne discharge under subsection (e), the reacquisition must be: (1) by the principal debtor; (2) in his own right (not in a representative character); (3) at or after the date of maturity (because before maturity re-negotiation is possible). When the principal debtor becomes the

holder of the instrument in his own right, the instruments is discharged because of the merger in his person of the characters of the creditor and debtor. Sec. 120. When persons secondarily liable on the instrument are discharged. - A person secondarily liable on the instrument is discharged: (a) By any act which discharges the instrument; (b) By the intentional cancellation of his signature by the holder; (c) By the discharge of a prior party; (d) By a valid tender or payment made by a prior party; (e) By a release of the principal debtor unless the holder's right of recourse against the party secondarily liable is expressly reserved; (f) By any agreement binding upon the holder to extend the time of payment or to postpone the holder's right to enforce the instrument unless made with the assent of the party secondarily liable or unless the right of recourse against such party is expressly reserved. j. Right to discharge a person secondarily liable by intentional cancellation of his signature.(Sec. 120 (b)) -- If the holder intentionally strikes out the signature of a person secondarily liable, the effect is to discharge him from liability on the instrument as if he has never been a party to the same. However, the right of a holder to cancel the signature of an indorser is subject to the limitation that the indorsement is not necessary to the holders title (Sec. 48) k. Right to Release the principal debtor and consequently discharge persons secondarily liable.(Sec. 120 (e)) -- The release of the principal debtor discharges the instrument and, therefore, all the secondary parties are also discharged. Moreover, with the release of the principal debtor, subsequent parties lose their right of recourse against him. Such, however, would not be the case if the holder reserved his right of recourse against the said subsequent parties, for then the effect of the reservation by the holder of his right is the implied reservation by the subsequent parties of their right of recourse against the principal debtor. This reservation of the right of recourse must be express. The release of the principal debtor must be made by the act of the holder and not by operation of law. l. Right to extend time for payment (Sec. 120 (f)) -- The phrase agreement binding on the holder means agreement binding on the holder made with the principal debtor. Hence, an agreement by the holder with a third party to extend the time of payment does not discharge the indorsers. To be binding, the agreement must be supported by a valuable consideration and for a definite period. -- subsection (f) is consistent with the rule that an extension granted to the debtor by the creditor without the consent of the guarantor extinguishes the guaranty (Art. 2079, NCC). But the mere failure on the part of the holder to demand payment does not of itself constitute an extension of time referred to herein. --The following cases, the agreement to extend time does not discharge a party secondarily liable: a. where the extension of time is consented by the party; and b. where the holder expressly reserves his right of recourse against such party. m. Right to renounce his right against any party to the instrument. Sec. 122. Renunciation by holder. - The holder may expressly renounce his rights against any party to the instrument before, at, or after its maturity. An absolute and unconditional renunciation of his rights against the principal debtor made at or after the maturity of the instrument discharges the instrument. But a renunciation does not affect the rights of a holder in due course without notice. A renunciation must be in writing unless the instrument is delivered up to the person primarily liable thereon. Effect of renunciation (1) A renunciation in favour of a secondary party may be made by the holder before, at or after maturity of the instrument. The effect of the renunciation is to discharge only such secondary party and all the parties subsequent to him but the instrument itself remain in force (Sec. 120 (c)). (2) A renunciation in favour of the principal debtor may be effected at or after maturity. The effect of the renunciation is to discharge the instrument and all parties thereto, provided the renunciation is made absolutely and unconditionally. In either case, said renunciation does not affect the rights of a HIDC without notice. n. Right to enforce payment of a materially altered instrument accdg. to its original tenor. Sec. 124. Alteration of instrument; effect of. - Where a negotiable instrument is materially altered without the assent of all parties liable thereon, it is avoided, except as against a party who has himself made, authorized, or assented to the alteration and subsequent indorsers. But when an instrument has been materially altered and is in the hands of a holder in due course not a party to the alteration, he may enforce payment thereof according to its original tenor. Material alteration refers to any change in the instrument which affects the liability of the parties in any way as specified in Sec. 125 (Sec. 125. What constitutes a material alteration. - Any alteration which changes:(a) The date; (b) The sum payable, either for principal or interest; (c) The time or place of payment: (d) The number or the relations of the parties; (e) The medium or currency in which payment is to be made; (f) Or which adds a

place of payment where no place ofpayment is specified, or any other change or addition whichalters the effect of the instrument in any respect, is a material alteration.) or changes the contract of the parties in any respect. Alteration by a partythe effect of a material alteration by the holder is to discharge the instrument and all prior parties thereto who did not give their consent to such alteration. Since no distinction is made, it does not matter whether it is favourable or unfavourable to the party making the alteration or to the interests of prior parties or whether it is innocently or fraudulently made. So that where the instrument has been altered although innocently, it is discharged but the innocent party can use upon the original debt for which it has been given. The law makes certain exceptions as to the effect of material alteration. It does not discharge against the instrument against: (a) a party who has made the alteration, and (b) a party who authorized or assented the alteration, (c) indorsers who indorsed subsequent to the alteration. Alteration by a strangerwhen the material alteration of the instrument is made by a stranger, it is called spoliation. No effect if the original meaning can be ascertained Right of a HIDCa material alteration avoids the instrument in the hands of one who is not a HIDC as against any prior party who has not assented to the alteration. But if an altered instrument is negotiated to a HIDC, he may enforce payment thereof accdg to its original tenor regardless of whether the alteration was innocent or fraudulent.

o. Right to resort to the referee in case of need. Sec. 131. Referee in case of need. - The drawer of a bill and any indorser may insert thereon the name of a person to whom the holder may resort in case of need; that is to say, in case the bill is dishonored by non-acceptance or non-payment. Suchperson is called a referee in case of need. It is in the option of the holder to resort to the referee in case of need or not as he may see fit. Referee in case of need is the person named by the drawer or indorser as the one to whom the holder may resort in case of need, that is, in case the bill is dishonoured by non-acceptance or non-payment. It is not obligatory upon the holder to apply to the referee in case of dishonor. The referee is not bound to to pay the holder but he may be liable to the party who named him. p. Right of the holder of a bill presenting the same for acceptance to require that the acceptance be written on the face of the bill. Sec. 133. Holder entitled to acceptance on face of bill. The holder of a bill presenting the same for acceptance may require that the acceptance be written on the bill, and, if such request is refused, may treat the bill as dishonored. The right to require acceptance on the bill and if refused, he may treat the bill as dishonoured and go against the persons secondarily liable after giving notice of dishonor. q. Right of holder of a bill to allow a period for the drawee to accept other than 24 hours. Sec. 136. Time allowed drawee to accept. - The drawee is allowed twenty-four hours after presentment in which to decide whether or not he will accept the bill; the acceptance, if given, dates as of the day of presentation. r. Right of a holder of a bill dishonoured but subsequently accepted to have the bill accepted as of the date of the first presentment Sec. 138. Acceptance of incomplete bill. - A bill may beaccepted before it has been signed by the drawer, or whileotherwise incomplete, or when it is overdue, or after it hasbeen dishonored by a previous refusal to accept, or by nonpayment. But when a bill payable after sight is dishonored by non-acceptance and the drawee subsequently accepts it, the holder, in the absence of any different agreement, is entitledto have the bill accepted as of the date of the first presentment. s. Right of a holder of a bill to refuse to take a qualified acceptance and treat the bill as dishonoured by non-acceptance if he does not obtain a qualified acceptance Sec. 142. Rights of parties as to qualified acceptance. The holder may refuse to take a qualified acceptance and if he does not obtain an unqualified acceptance, he may treat the bill as dishonored by non-acceptance. Where a qualified acceptance is taken, the drawer and indorsers are discharged from liability on the bill unless they have expressly or impliedly authorized the holder to take a qualified acceptance, or subsequently assent thereto. When the drawer or an indorser receives notice of a qualified acceptance, he must, within a reasonable time, express his dissent to the holder or he will be deemed to have assented thereto. t. Right of a holder of a bill to be presented for acceptance either to present for acceptance or negotiate it within reasonable time. Sec. 144. When failure to present releases drawer and indorser. - Except as herein otherwise provided, the holder of a bill which is required by the next preceding section to be presented for acceptance must either present it for acceptance or negotiate it within a reasonable time. If he fails to do so, the drawer and all indorsers are discharged. u. Right of a holder of a bill dishonoured by non-acceptance to have immediate recourse against drawer and insdorsers. v.Rights of holders to whom different parts of a bill in set are negotiated.

Sec. 179. Right of holders where different parts are negotiated. - Where two or more parts of a set are negotiated to different holders in due course, the holder whose title first accrues is, as between such holders, the true owner of the bill. But nothing in this section affects the right of a person who, in due course, accepts or pays the parts first presented to him. w. Right of holder of a bill to allow acceptance of the same for honor. Sec. 161. When bill may be accepted for honor. - When a bill of exchange has been protested for dishonor by non-acceptance or protested for better security and is not overdue, any person not being a party already liable thereon may, with the consent of the holder, intervene and accept the bill supra protest for the honor of any party liable thereon or for the honor of the person for whose account the bill is drawn. The acceptance for honor may be for part only of the sum for which the bill is drawn; and where there has been an acceptance for honor for one party, there may be a further acceptance by a different person for the honor of another party. Acceptance for honor is an undertaking by a stranger to the bill after protest for the benefit of any party liable thereon, or for honor of the person for whose account the bill is drawn which acceptance inures also to the benefit of all parties subsequent to the person whose honor it is accepted, and conditioned to pay the bill when it becomes due if the original drawee does not pay.