L A W M E M O R Y A I D Negotiable Instruments Law discharge by novation is allowed .

79 General rule: When materially altered, without the consent of all parties liable, theinstrument is avoided except as against:a.the party who has made the alterationb.the party who :authorized or assented to the alteration. c . s u b s e q u e n t i n d o r s e r s Exception if in the hands of a HDC, may be enforced according to its original tenor Notes on Section 124 there is no distinction between fraudulent and innocent alteration .80 Material Alteration an alternation is said to be material if it alters the effect of theinstrument.Under Section 125 the following changes are considered material alterations:a . d a t e s b . t h e s u m p a y a b l e c . t i m e a n d p l a c e o f paymentd.number or relations of the partiese.medium or currency for p a y m e n t f.adding a place of payment where no place is specifiedg.any other which alters the affect of the instrument .81 Instances where a BOE may be treated as a PN:a . where the drawer and the drawee are one and the sameb.where the drawee is a fictitious personc.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 .82 Acceptance is the signification by the drawee of his assent to the order of thedrawer . It is an act by which a person on whom the BOE is drawn assents to the request of the drawer to pay it. (Sec. 132 NIL)Acceptance may be:a . a c t u a l b . c o n s t r u c t i v e c . g e n e r a l ( S e c . 1 4 0 ) d . q u a l i f i e d :( S e c . 1 4 1 ) Requisites of actual acceptance in writing signed by the drawee must not express the drawee will perform his promise by any other means thanpayment of money communicated or delivered to the holder 87.A holder has the right:a . r e q u i r e t h a t acceptance be written on the bill and if refused, treat it as i f dishonored (Sec. 133)b . r e f u s e t o a c c e p t a q u a l i f i e d a c c e p t a n c e a n d m a y t r e a t i t a s d i s h o n o r e d ( S e c . 142)88.Constructive Acceptance:a.where the drawee to whom the bill has been delivered destroys it b . t h e d r a w e e r e f u s e s w i t h i n 2 4 h r s a f t e r s u c h d e l i v e r y o r w i t h i n s u c h t i m e a s i s given, to return the bill accepted or not. (Sec. 137 NIL)Notes on Section 137

C O M M E R C I A L

L A W M E M O R Y A I D Negotiable Instruments Law .drawee becomes primarily liable as an acceptor mere retention is equivalent to acceptance89.When presentment for acceptance is necessary:a.if necessary to fix the maturity of the bill b.if it is expressly stipulated that it shall be

C O M M E R C I A L

presented for acceptancec.if the bill is drawn payable elsewhere than the residence or place of business of the drawee (Sec. 143 NIL)Notes on Section 143 Presentment is the production of a BOE to the drawee for his acceptance in on order case is presentment necessary to make parties liable.90. Summary on presentment for acceptance of :Bills of Exchange .a to make the drawee primarily liable and for the accrual of secondary liability (Sec. (144 .b necessary to fix maturity date, where bill expressly stipulates presentment, billpayable other (than place of drawee (Sec. 143 .c when presentment is excused: drawee is dead, hides, is fictitious, incapacitatedperson, after due diligence presentment cannot be made, presentment is refusedon another ground although presentment is :irregular (Sec. 148)90.General rule: Protest is required only for foreign billsException inland bills and notes may also be protested if desiredProtest is required:a.where the foreign bill is dishonored by non acceptanceb.where the foreign bill is dishonored by nonpaymentc.where the bill has been accepted for honor, it must be protested for non- payment before it is presented for payment to the acceptor for honor d . w h e r e t h e b i l l c o n t a i n s a r e f e r e e i n c a s e o f n e e d , i t m u s t b e p r o t e s t e d f o r n o n payment before presentment for payment to the referee in case of need (Sec.152)Notes on Section 152 Protest - formal statement in writing made by a notary under his seal of office atthe request of the holder, in which it is declare that the some was presented for payment or acceptance (as the .case may be) and such was refused it means all steps or acts accompanying the dishonor of a bill or note necessaryto charge an indorser .required when the instrument is a foreign bill of exchange it must be made on the same date of dishonor, by a notary/respectable citizen of the place in the presence of 2 credible witnesses so recourse to secondary parties91. Acceptance for Honor (Sec. 161 NIL) an acceptance of a bill made by a stranger to it before maturirty, where the drawee of the bill has:a . r e f u s e d t o a c c e p t i t b.and the bill has been protested for non- acceptancec.or where the bill has been protested for better :security Requisites for acceptance for honor the bill must have been previously protested a) for non-acceptance b) or for better security the bill is not overdue at the time of the acceptance for honor

C O M M E R C I A L

L A W M E M O R Y A I D Negotiable Instruments Law the acceptor for honor must be a stranger to the bill the holder must give his consentNotes on Acceptance for Honor -

Purpose: to save the credit of the parties to the instrument or some party to it asthe drawer, .drawee, or indorser or somebody else Acceptor for honor is liable to the holder and to all the parties to the b i l l subsequent to the party for whose honor he has accepted (Sec. 164)92.How acceptance for honor is made:a.in writing and indicated that it is an acceptance for honor b.signed by the person making the acceptance (Sec. 162 NIL) 9 3 . P a y m e n t f o r H o n o r p a y m e n t m a d e t h r o u g h a n o t a r i a l a c t o f h o n o r o f a p a r t y liable /stranger to the bill after bill has been dishonored by non-payment by the acceptor and protested for :non-payment by the holder Requisites .a protest for non-payment .b :any person may pay supra protest Form for payment of honor .a .payment must be attested by notarial act appended to the protest, or form anextension to it .b notarial act of honor must be based on a declaration by the payer for honor 9 4 . B i l l s i n S e t - b i l l o f e x c h a n g e d r a w n i n s e v e r a l p a r t s , e a c h p a r t o f t h e s e t b e i n g numbered and containing a reference to the other parts, the whole of the parts justconstituting one bill (Sec 178 (NIL

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L A W M E M O R Y A I D Negotiable Instruments Law discharge by novation is allowed .79 General rule: When materially altered, without the consent of all parties liable, theinstrument is avoided except as against:a.the party who has made the alterationb.the party who :authorized or assented to the alteration. c . s u b s e q u e n t i n d o r s e r s Exception if in the hands of a HDC, may be enforced according to its original tenor Notes on Section 124 there is no distinction between fraudulent and innocent alteration .80 Material Alteration an alternation is said to be material if it alters the effect of theinstrument.Under Section 125 the following changes are considered material alterations:a . d a t e s b . t h e s u m p a y a b l e c . t i m e a n d p l a c e o f paymentd.number or relations of the partiese.medium or currency for p a y m e n t f.adding a place of payment where no place is specifiedg.any other which alters the affect of the instrument

C O M M E R C I A L

.81 Instances where a BOE may be treated as a PN:a . where the drawer and the drawee are one and the sameb.where the drawee is a fictitious personc.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 .82 Acceptance is the signification by the drawee of his assent to the order of thedrawer . It is an act by which a person on whom the BOE is drawn assents to the request of the drawer to pay it. (Sec. 132 NIL)Acceptance may be:a . a c t u a l b . c o n s t r u c t i v e c . g e n e r a l ( S e c . 1 4 0 ) d . q u a l i f i e d :( S e c . 1 4 1 ) Requisites of actual acceptance in writing signed by the drawee must not express the drawee will perform his promise by any other means thanpayment of money communicated or delivered to the holder 87.A holder has the right:a . r e q u i r e t h a t acceptance be written on the bill and if refused, treat it as i f dishonored (Sec. 133)b . r e f u s e t o a c c e p t a q u a l i f i e d a c c e p t a n c e a n d m a y t r e a t i t a s d i s h o n o r e d ( S e c . 142)88.Constructive Acceptance:a.where the drawee to whom the bill has been delivered destroys it b . t h e d r a w e e r e f u s e s w i t h i n 2 4 h r s a f t e r s u c h d e l i v e r y o r w i t h i n s u c h t i m e a s i s given, to return the bill accepted or not. (Sec. 137 NIL)Notes on Section 137

L A W M E M O R Y A I D Negotiable Instruments Law .drawee becomes primarily liable as an acceptor mere retention is equivalent to acceptance89.When presentment for acceptance is necessary:a.if necessary to fix the maturity of the bill b.if it is expressly stipulated that it shall be presented for acceptancec.if the bill is drawn payable elsewhere than the residence or place of business of the drawee (Sec. 143 NIL)Notes on Section 143 Presentment is the production of a BOE to the drawee for his acceptance in on order case is presentment necessary to make parties liable.90. Summary on presentment for acceptance of :Bills of Exchange .a to make the drawee primarily liable and for the accrual of secondary (liability (Sec. 144 .b necessary to fix maturity date, where bill expressly stipulates presentment, billpayable other than (place of drawee (Sec. 143 .c when presentment is excused: drawee is dead, hides, is fictitious, incapacitatedperson, after due diligence presentment cannot be made, presentment is refusedon another ground although presentment is :irregular (Sec. 148)90.General rule: Protest is required only for foreign billsException

C O M M E R C I A L

inland bills and notes may also be protested if desiredProtest is required:a.where the foreign bill is dishonored by non acceptanceb.where the foreign bill is dishonored by nonpaymentc.where the bill has been accepted for honor, it must be protested for non- payment before it is presented for payment to the acceptor for honor d . w h e r e t h e b i l l c o n t a i n s a r e f e r e e i n c a s e o f n e e d , i t m u s t b e p r o t e s t e d f o r n o n payment before presentment for payment to the referee in case of need (Sec.152)Notes on Section 152 Protest - formal statement in writing made by a notary under his seal of office atthe request of the holder, in which it is declare that the some was presented for payment or acceptance (as the .case may be) and such was refused it means all steps or acts accompanying the dishonor of a bill or note necessaryto charge an indorser .required when the instrument is a foreign bill of exchange it must be made on the same date of dishonor, by a notary/respectable citizen of the place in the presence of 2 credible witnesses so recourse to secondary parties91. Acceptance for Honor (Sec. 161 NIL) an acceptance of a bill made by a stranger to it before maturirty, where the drawee of the bill has:a . r e f u s e d t o a c c e p t i t b.and the bill has been protested for non- acceptancec.or where the bill has been protested for better :security Requisites for acceptance for honor the bill must have been previously protested a) for non-acceptance b) or for better security the bill is not overdue at the time of the acceptance for honor

L A W M E M O R Y A I D Negotiable Instruments Law the acceptor for honor must be a stranger to the bill the holder must give his consentNotes on Acceptance for Honor Purpose: to save the credit of the parties to the instrument or some party to it asthe drawer, .drawee, or indorser or somebody else Acceptor for honor is liable to the holder and to all the parties to the b i l l subsequent to the party for whose honor he has accepted (Sec. 164)92.How acceptance for honor is made:a.in writing and indicated that it is an acceptance for honor b.signed by the person making the acceptance (Sec. 162 NIL) 9 3 . P a y m e n t f o r H o n o r p a y m e n t m a d e t h r o u g h a n o t a r i a l a c t o f h o n o r o f a p a r t y liable /stranger to the bill after bill has been dishonored by non-payment by the acceptor and protested :for non-payment by the holder Requisites .a protest for non-payment .b :any person may pay supra protest Form for payment of honor .a .payment must be attested by notarial act appended to the protest, or form anextension to it .b

C O M M E R C I A L

notarial act of honor must be based on a declaration by the payer for honor 9 4 . B i l l s i n S e t - b i l l o f e x c h a n g e d r a w n i n s e v e r a l p a r t s , e a c h p a r t o f t h e s e t b e i n g numbered and containing a reference to the other parts, the whole of the parts justconstituting one bill (Sec 178 (NIL

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