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Act No.

2031 (c) by stated installments, with a provision that,


upon default in payment of any installment or of
February 03, 1911 interest, the whole shall become due; or
THE NEGOTIABLE INSTRUMENTS LAW

(d) with exchange, whether at a fixed rate or at


ACT NO. 2031 the current rate; or

February 03, 1911


(e) with costs of collection or an attorney's fee, in
case payment shall not be made at maturity.
THE NEGOTIABLE INSTRUMENTS LAW
Sec. 3. When promise is unconditional. - An
I. FORM AND INTERPRETATION unqualified order or promise to pay is
unconditional within the meaning of this Act
though coupled with:chanroblesvirtuallawlibrary
Section 1. Form of negotiable instruments. - An (a) An indication of a particular fund out of
instrument to be negotiable must conform to the which reimbursement is to be made or a
following particular account to be debited with the
requirements:chanroblesvirtuallawlibrary amount; or
(a) It must be in writing and signed by the maker
or drawer;
(b) A statement of the transaction which gives
rise to the instrument.
(b) Must contain an unconditional promise or But an order or promise to pay out of a particular
order to pay a sum certain in money; fund is not unconditional.chan robles virtual law
library

(c) Must be payable on demand, or at a fixed or


determinable future time; Sec. 4. Determinable future time; what
constitutes. - An instrument is payable at a
determinable future time, within the meaning of
(d) Must be payable to order or to bearer; and this Act, which is expressed to be
payable:chanroblesvirtuallawlibrary

(a) At a fixed period after date or sight; or


(e) Where the instrument is addressed to a
drawee, he must be named or otherwise
indicated therein with reasonable certainty.
(b) On or before a fixed or determinable future
Sec. 2. What constitutes certainty as to sum. - The time specified therein; or
sum payable is a sum certain within the meaning
of this Act, although it is to be
paid:chanroblesvirtuallawlibrary (c) On or at a fixed period after the occurrence
(a) with interest; or of a specified event which is certain to happen,
though the time of happening be uncertain.

An instrument payable upon a contingency is not


(b) by stated installments; or negotiable, and the happening of the event
does not cure the defect.
Sec. 5. Additional provisions not affecting
negotiability. - An instrument which contains an
order or promise to do any act in addition to the Sec. 7. When payable on demand. - An
payment of money is not negotiable. But the instrument is payable on
negotiable character of an instrument otherwise demand:chanroblesvirtuallawlibrary
negotiable is not affected by a provision
which:chanroblesvirtuallawlibrary (a) When it is so expressed to be payable on
demand, or at sight, or on presentation; or
(a) authorizes the sale of collateral securities in
case the instrument be not paid at maturity; or

(b) In which no time for payment is expressed.

(b) authorizes a confession of judgment if the Where an instrument is issued, accepted, or


instrument be not paid at maturity; or indorsed when overdue, it is, as regards the
person so issuing, accepting, or indorsing it,
payable on demand.
(c) waives the benefit of any law intended for
the advantage or protection of the obligor; or
Sec. 8. When payable to order. - The instrument is
payable to order where it is drawn payable to
(d) gives the holder an election to require the order of a specified person or to him or his
something to be done in lieu of payment of order. It may be drawn payable to the order
money. of:chanroblesvirtuallawlibrary

But nothing in this section shall validate any (a) A payee who is not maker, drawer, or
provision or stipulation otherwise illegal. drawee; or

Sec. 6. Omissions; seal; particular money. - The (b) The drawer or maker; or
validity and negotiable character of an
instrument are not affected by the fact
that:chanroblesvirtuallawlibrary (c) The drawee; or

(a) it is not dated; or

(d) Two or more payees jointly; or

(b) does not specify the value given, or that any


value had been given therefor; or
(e) One or some of several payees; or

(c) does not specify the place where it is drawn


or the place where it is payable; or (f) The holder of an office for the time being.

Where the instrument is payable to order, the


payee must be named or otherwise indicated
(d) bears a seal; or therein with reasonable certainty.

(e) designates a particular kind of current money Sec. 9. When payable to bearer. - The instrument
in which payment is to be made. is payable to

But nothing in this section shall alter or repeal any bearer:chanroblesvirtuallawlibrary


statute requiring in certain cases the nature of
the consideration to be stated in the instrument. (a) When it is expressed to be so payable; or
from one person to another in such manner as to
constitute the transferee the holder thereof. If
(b) When it is payable to a person named therein payable to bearer, it is negotiated by delivery; if
or bearer; or payable to order, it is negotiated by the
indorsement of the holder and completed by
delivery.
(c) When it is payable to the order of a fictitious
or non-existing person, and such fact was known
to the person making it so payable; or Negotiable Instruments Defined Written contracts
for the payment of money; by its form, intended
as a substitute for money and intended to pass
(d) When the name of the payee does not from hand to hand, to give the holder in due
purport to be the name of any course the right to hold the same and collect the
sum due. It is a special contract which complies
person; or with the requirements of Negotiable Instruments
Law (Act No. 2031)

(e) When the only or last indorsement is an


indorsement in blank. Negotiability – it is that attribute or property
whereby a bill or a note or check may pass from
hand to hand similar to money, so as to give the
Sec. 126. Bill of exchange, defined. - A bill of holder in due course the right to hold the
exchange is an unconditional order in writing instrument and to collect the sum payable from
addressed by one person to another, signed by himself, free from defense.
the person giving it, requiring the person to whom
it is addressed to pay on demand or at a fixed or Accumulation of Secondary Contracts –
determinable future time a sum certain in money secondary contracts are picked up and carried
to order or to bearer. along with Negotiable instruments as they are
negotiated from one person to another; or in the
course of negotiation of negotiable Instruments,
a series of juridical ties between the parties
Sec. 184. Promissory note, defined. - A negotiable thereto arise either by law or by privity. The
promissory note within the meaning of this Act is indorsers become secondarily liable to holder.
an unconditional promise in writing made by one
person to another, signed by the maker,
engaging to pay on demand, or at a fixed or
determinable future time, a sum certain in money "Indorsement" means an indorsement completed
to order or to bearer. Where a note is drawn to by delivery;
the maker's own order, it is not complete until
indorsed by him.

Sec. 185. Check, defined. - A check is a bill of


exchange drawn on a bank payable on
demand. Except as herein otherwise provided,
the provisions of this Act applicable to a bill of
exchange payable on demand apply to a
check.

Sec. 30. What constitutes negotiation. - An


instrument is negotiated when it is transferred