Negotiable Instruments Law – Discharge


Memory Aid

Based on the Outline of the 1994 Edition of Campos & Campos


  1. Of the Instrument
  2. payment in due course by or on behalf of principal debtor
  • Payment in due course:
  1. made at or after maturity
  2. to the holder thereof
  3. in good faith and without notice that his title is defective
  4. payment in due course by party accommodated where party is made/ accepted for accommodation
  5. intentional cancellation by holder
  • if unintentional or under mistake or without authority of holder, inoperative. Burden of proof  on party which alleges it was unintentional, etc.
  1. any other act which discharges a simple contract
  2. principal debtor becomes holder of instrument at or after maturity in his own right
  3. renunciation of holder:
  • holder may expressly renounce his rights vs. any party to the instrument, before or after its maturity
  • absolute and unconditional renunciation of his rights vs. principal debtor made at or after maturity discharges the instrument
  • renunciation does not affect rights of HDC w/o notice.
  • Renunciation must be in writing unless instrument delivered up to person primarily liable thereon
  1. material alteration (sec. 124: material alteration w/o assent of all parties liable avoids instrument except as against party to alteration and subsequent indorsers)


  1. Of secondary parties
  2. any act which discharges the instrument
  3. intentional cancellation of signature by holder
  4. discharge of prior party
  5. valid tender of payment made by prior party
  6. release of principal debtor, unless holder’s right of recourse vs. 2ndary party reserved
  7. any agreement binding upon holder to extend time of payment, or to postpone holder’s right to enforce instrument, unless made with assent of party secondarily liable, or unless right of recourse reserved.
  8. Failure to make due presentment (sec. 70, 144)
  9. failure to give notice of dishonor
  10. certification of check at instance of holder
  11. reacquisition by prior party
  • where instrument negotiated back to a prior party, such party may reissue and further negotiate, but not entitled to enforce payment vs. any intervening party to whom he was personally liable
  • where instrument is paid by party secondarily liable, it’s not discharged, but
  1. the party so paying it is remitted to his former rights as regard to all prior parties
  2. and he may strike out his own and all subsequent indorsements, and again negotiate instrument, except
  • where it’s payable to order of 3rd party and has been paid by drawer
  • where it’s made/accepted for accommodation and has been paid by party accommodated.


Reference:  University of the Philippines

BarOps ’99

Commercial Law – Val Feria, Mina Herrera, Gary Mallari & Rachel Ramos


About Magz

First of all, I am not a lawyer. I'm a graduate of AB Political Science and went to the College of Law but stopped going to law school for some reasons. I'm a passionate teacher who has been teaching English to speakers of other languages and a person who likes writing and blogging. I lost some important files and software when my computer broke down so the reason I created this website is to preserve the notes, reviewers and digests I collected when I was at the law school and at the same time, I want to help out law students who do not have enough time to go and read books in the library.

Posted on December 19, 2011, in Negotiable Instruments Law and tagged . Bookmark the permalink. Leave a comment.

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