Article 7p. 7

COMMERCIAL LAWS NEGOTIABLE INSTRUMENTS, CORPORATION, INSURANCE, TRANSPORTATION, BANKING

TITLE I Negotiable Instruments in General

CHAPTER I Form and Interpretation

SECTION

1. Form

of

Negotiable

Instruments.

—

An

instrument

to

be

negotiable

must

conform

to

the

following requirements: cdasia

(a)It must be in writing and signed by the maker or

drawer;

(b)Must contain an unconditional promise or order to pay

a sum certain in money;

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

determinable future time;

(d)Must be payable to order or to bearer; and

(e)Where the instrument is addressed to a drawee, he

must be named or otherwise indicated therein with

reasonable certainty. cda

SECTION 2. Certainty as to Sum ; What Constitutes . —

The sum payable is a sum certain within the meaning of

this Act, although it is to be paid —

(a)With interest; or

(b)By stated installments; or

(c)By stated installments, with a provision that upon

default in payment of any installment or of interest the

whole shall become due; or

(d)With exchange, whether at a fixed rate or at the

current rate; or

(e)With costs of collection or an attorney's fee, in case

payment shall not be made at maturity. cdrep

SECTION

3. When

Promise

is

Unconditional .

—

An

unqualified order or promise to pay is unconditional

within the meaning of this Act, though coupled with —

(a)An indication of a particular fund out of which

reimbursement is to be made, or a particular account to

be debited with the amount; or

(b)A statement of the transaction which gives rise to the

instrument.

But an order or promise to pay out of a particular fund is

not unconditional.

SECTION

4. Determinable

Future

Time ;

What

Constitutes .

—

An

instrument

is

payable

at

a

determinable future time, within the meaning of this

Act, which is expressed to be payable —

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

(b)On or before a fixed or determinable future time

specified therein; or

(c)On or at a fixed period after the occurrence of a

specified event, which is certain to happen, though the

time of happening be uncertain.

An

instrument

payable

upon

a

contingency

is

not

negotiable, and the happening of the event does not cure

the defect. cdphil

SECTION

5. Additional

Provision

Not

Affecting

Negotiability . — An instrument which contains an order

or promise to do any act in addition to the payment of

money is not negotiable. But the negotiable character

of an instrument otherwise negotiable is not affected

by a provision which —

(a)Authorizes the sale of collateral securities in case the

instrument be not paid at maturity; or

(b)Authorizes a confession of judgment if the instrument

be not paid at maturity; or

(c)Waives the benefit of any law intended for the

advantage or protection of the obligor; or

(d)Gives the holder an election to require something to be

done in lieu of payment of money.

But nothing in this section shall validate any provision or

stipulation otherwise illegal. cdasia

SECTION 6. Omission ; Seal ; Particular Money . — The

validity and negotiable character of an instrument are

not affected by the fact that —

(a)It is not dated; or

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

been given therefor; or

(c)Does not specify the place where it is drawn or the

place where it is payable; or

(d)Bears a seal; or

(e)Designates a particular kind of current money in which

payment is to be made. cdrep

But nothing in this section shall alter or repeal any statute

requiring in certain cases the nature of the consideration

to be stated in the instrument.

SECTION

7. When

Payable

on

Demand .

—

An

instrument is payable on demand —

(a)Where it is expressed to be payable on demand, or at

sight, or on presentation; or

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

Where an instrument is issued, accepted, or indorsed

when overdue, it is, as regards the person so issuing,

accepting, or indorsing it, payable on demand.

SECTION 8. When Payable to Order . — The instrument is

payable to order where it is drawn payable to the order

of a specified person or to him or his order. It may be

drawn payable to the order of —

(a)A payee who is not maker, drawer, or drawee; or

(b)The drawer or maker; or

(c)The drawee; or

(d)Two or more payees jointly; or

(e)One or some of several payees; or

(f)The holder of an office for the time being. cdpr

Where the instrument is payable to order the payee must

be named or otherwise indicated therein with reasonable

certainty.

SECTION 9. When Payable to Bearer . — The instrument

is payable to bearer —

(a)When it is expressed to be so payable; or

(b)When it is payable to a person named therein or

bearer; or

(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

(d)When the name of the payee does not purport to be

the name of any person; or

(e)When the only or last indorsement is an indorsement

in blank.

SECTION 10. Terms , When Sufficient . — The instrument

need not follow the language of this Act, but any terms

are

sufficient

which clearly indicate an intention to

conform to the requirements hereof. asiadc

SECTION 11. Date , Presumption As To . — Where the

instrument or an acceptance or any indorsement thereon

is dated, such date is deemed prima facie to be the true

date of the making, drawing, acceptance, or indorsement,

as the case may be.

SECTION

12. Antedated

and

Postdated .

—

The

instrument is not invalid for the reason only that it is

antedated or postdated, provided this is not done for an

illegal or fraudulent purpose. The person to whom an

instrument so dated is delivered acquires the title thereto

as of the date of delivery.

SECTION 13. When Date May Be Inserted . — Where an

instrument expressed to be payable at a fixed period after

date is issued undated, or where the acceptance of an

© Compiled by RGL

7 of 211