RAPADAS, MARIAN C.

Negotiable Instruments Law (S.Y. 2015-2016)

ATTY. SENSON
Right of Party Who Discharged Instrument (Sec. 121)
The party so discharging the instrument:
(1) Is remitted to his former rights as regard all prior parties
(2) May strike out his own and all subsequent indorsements; and
(3) May again negotiate the instrument, except:
a) Where it is payable to the order of a third person and has been
paid by the drawer; and
b) Where it was made or accepted for accommodation and has been
paid by the part accommodated.

Renunciation by Holder (Sec. 122)

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.
Renunciation must be in writing unless the instrument is delivered up to the
person primarily liable thereon
Renunciation does not affect the rights of a holder in due course without
notice.

RAPADAS, MARIAN C.
Negotiable Instruments Law (S.Y. 2015-2016)
ATTY. SENSON
Application of Section 122
1.

Applies only to renunciation by the unilateral act of the holder without

consideration and in cases where the instrument is not delivered up

2.

to the person intended to be released.

Renunciationact of surrendering a claim or right with or without
recompense but it can be applied with equal propriety to the
relinquishing of a demand upon an agreement supported by a
consideration.

Form of Renunciation
- It must be in writing and must be express

Time for Making Renunciation

1.

Before maturity

2.

At maturity

3.

After maturity

When Renunciation Discharges Instrument

1.

Renunciation discharges the instrument when it is absolute and

2.
3.

unconditional
It is made in favor of the person primarily liable
It is made at or after maturity

Effects of Renunciation:

RAPADAS, MARIAN C.
Negotiable Instruments Law (S.Y. 2015-2016)
ATTY. SENSON
1. Made in favor of principal debtor made at or after the maturity (made
absolutely and unconditionally? of the instrument discharges the
instrument (Sec. 122)
2. Made in favor of a secondary party may be made by the holder
before, at or after maturity discharges only the secondary parties
and all subsequent to him (Sec. 122)
3. Renunciation does not affect the rights of a holder in due course
without notice (Sec. 120)