SECTIONS 42-44

OF LAW ON
NEGOTIABLE
INSTRUMENTS
 SECTION 142
Right of Holder to General Acceptance
 A holder has a right to require a general or unqualified
acceptance and if a qualified acceptance has been made, he
may refuse it and treat the bill as dishonored by non-
acceptance if he does not obtain an unqualified acceptance.
Accordingly, he must notify the drawer and the indorsers of
the dishonor.
 The reason is that the drawer and the indorsers engage
the bill will be paid as drawn or indorsed by them and the
effect of a qualified acceptance would be to make a contract
for them without their consent. However, if the holder agrees
to a qualified acceptance, he must give notice thereof to the
drawer and the indorsers and, of course, they are not
discharged from liability if they expressly or impliedly give
their consent thereto.
 There is implied assent, if the drawer or an indorser,
after receiving notice of a qualified acceptance, does not
express his dissent within a reasonable time to the holder.
 SECTION 142
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.
 SECTION 143
PRESENTMENT FOR ACCEPTANCE
Sec. 143.When presentment for acceptance must be made.
— Presentment or acceptance must be made —
(a) Where the bill is payable after sight, or in any
other case, where presentment for acceptance is necessary
in order to fix the maturity of the instrument; or

(b) Where the bill expressly stipulates that it shall be

presented for acceptance; or

(c)Where the bill is drawn payable elsewhere than at

the residence or place of business of the drawee. In no other
case is presentment for acceptance necessary in order to
render any party to the bill liable.
 SECTION 143
Meaning of Presentment for Acceptance
 Presentment for acceptance is the production or
exhibition of a bill of exchange to die drawee for his
acceptance or payment.
 The words "presentment for acceptance" include
presentment for payment also. While there is a
conflict of authority, the cases maintaining this view
represent die overwhelming weight of authority.
(Beutel'sBrarman, op. dt., p. 1250.)
 SECTION 143
When Presentment for Acceptance Necessary
 Section 143 enumerates the cases when
presentment for acceptance is necessary.
 Under subsection (a), it is essential to fix the
maturity date of the instrument; under
subsection (b), to comply with the express
stipulation of the parties in the bill itself; and
under subsection (c), to inform the drawee of the
existence of the bill so that he can make
arrangements for its payment on the date of
maturity at the place designated therein.
 SECTION 143
EXAMPLES:

1)Bill payable after sight.

— A bill payable 30 days after sight. Its date of maturity
shall be computed 30 days from the date of its
presentment. The same is true with a bill payable so many
days after demand.

(2)Bill with express stipulation.

— This is self-explanatory.

(3) Bill payable elsewhere.

— A bill payable to P at P.N.B, Manila, drawn against W,
residing and having his place of business in Quezon City.
 SECTION 143
When Presentment for Acceptance not Necessary
 Bills payable on demand (e.g., checks) or on sight and
time bills or bills payable at a day certain, or at a fixed
time after its date, or upon other certain event which does
not fall under Section 143(b) and (c), need not be presented
for acceptance but only for payment in order to charge the
drawer or indorsers. (ibid.,2nd par.; see Phil. National
Bank vs. Seato, 91Phil. 756 [1952]; Prudential Bank vs.
Intermediate Appellate Court, 216SCRA 257 [1992].)
 However, it is to the holder's interest that the bill
should be accepted as only by accepting it does the drawee
become bound to pay it and until such acceptance, the
holder has for his debtor only the drawer, and the step is
one which a prudent man of business ordinarily careful of
his interest, would take for his protection; and if the
drawee refuses to accept,the bill will be deemed dishonored
by non-acceptance and the holder then must proceed in the
same manner as if the bill required acceptance. (Nat.Park
Bank v. Saitta, 111 N.Y. Supp. 927; see Sec. 150.)
 SECTION 144
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.
 SECTION 144
Necessity for Presentment for Acceptance or
Negotiation Within a Reasonable Time.
 In the three cases provided in Section 143, it is
necessary: (1) to present the bill for acceptance; or (2) to
negotiate it (even without presentment for acceptance)
within a reasonable time (see Sec. 193.) to charge the drawer
and all indorsers.
 The reason is that the drawer and indorsers have a right
in having the bills accepted immediately in order to shorten
the time of payment and thus put a limit to the period of their
liability and likewise to enable them to protect themselves by
other means before it is too late, if the bill is not accepted and
paid within the time originally contemplated by
them.(Mimrocks v. Woody, 2 S.E. 249.) And this is true even if
it is shown thatthe drawee is perfectly solvent and no damage
is caused to the drawer and indorsers by the delay. (Allan v.
Eldred, 50 Ms. 132; Thornburg v. Emmens,23 W. Vao 333; as
to check see Sec. 186.)
 QUESTIONS
Multiple Choice:
1. Sec. 142. The may refuse to take a qualified
acceptance.
a. holder c. drawee
b. drawer d. indorser
Ans. a
2. The production or exhibition of a bill of exchange to die
drawee for his acceptance or payment.
a. Charges c. acceptance
b. presentment for acceptance d. bill
Ans. b
 QUESTIONS
3. How many cases enumerates under Sec.143 when
presentment for acceptance is necessary.
a. two c. three
b. four d. five
Ans: c
4. The words "presentment for acceptance" include
presentment for also.
a. bill c. charges
b. payment d. none of the above
Ans. b
 QUESTIONS
5. Presentment or acceptance must be made, where the bill is
payable sight.
a. before c. either a or b
b. after d. none of the above
Ans: b
6. Where a qualified acceptance is taken, the drawer and
indorsers are from liability on the bill.
a. charged c. discharged
b. exempted d. qualified
Ans: c
 QUESTIONS
7. Presentment or acceptance must be made, where the
bill is drawn payable elsewhere than at the residence
or place of business of the
a. drawer c. indorser
b. drawee d. holder
Ans: b
8. The necessity for presentment for acceptance or negotiation
within a reasonable time is under section
a. 144 c. 146
b. 145 d. 143
Ans: a
 QUESTIONS
9. Section 143. Under subsection (a) it is essential to fix the
date of the instrument
a. payment c. allowed
b. discharge d. maturity
Ans. d
10. Under what Section is the right of holder to general
acceptance.
a. Section 143 c. Section 144
b. Section 142 d. Section 145
Ans. b