Reported by Group Vi MLC Nil Class, 2019 Feb. Atty. Caesar Ortega (Professor)

REPORTED BY GROUP VI MLC NIL CLASS , 2019 FEB. ATTY.
CAESAR ORTEGA (PROFESSOR)

PAYMENT FOR HONOR
Payment for honor is payment made by a

person, whether a party to the bill or not,
after it has been protested for non-
payment, for the benefit of any party
liable thereon or for the benefit of the
person for whose account it was drawn.
REPORTED BY GROUP VI MLC NIL CLASS , 2019 FEB. ATTY. CAESAR ORTEGA (PROFESSOR)
PAYMENT SUPRA PROTEST
This is because prior protest for non-payment is

required. It is not applicable to promissory notes.
Thus, a person who, not being a regular party to a
note, pays it for the honor or for the credit of the maker
or indorsers, does not acquire any right of recourse
against prior parties. (Smith v. Sawyer, 55 Me. 139, 92 Am. Dec. 576.)
PAYMENT FOR HONOR?
Sec. 171. Who may make payment for honor. — Where
bill has been protested for non-payment, any person
may intervene and pay it supra protest for the honor of
any person liable thereon or for the honor of the
person for whose account it was drawn.
Under Section 171, payment for honor may be made
by a party to the bill or by a stranger. Thus, it may
be made by the drawee after he has refused to accept
the bill. (Norton, op. cit., p. 202.)
It has been held that the drawer of check which has
been dishonored and protested has a right to
intervene and pay it to protect his honor. (Hooper v.
Herring, 70 So. 308.)
PAYMENT FOR HONOR
Payment for honor may be availed of when the holder,
knowing that the bill has already been dishonored for
non-payment, does not want to indorse the bill and
thereby incurs the liabilities of an indorser specified
under Section 66, or of one negotiating by mere delivery
under Section 65.
PAYMENT FOR HONOR,
how made
Sec. 172. Payment for honor; how made.—The
payment for honor supra protest in order to operate
as such and not as a mere voluntary payment must
be attested by a notarial act of honor which may be
appended to the protest or form an extension to it.
Sec. 173. Declaration before payment for honor. —
The notarial act of honor must be on a declaration
made by the payer for honor or by his agent in that
behalf declaring his intention to pay the bill for
honor and for whose honor he pays.
PAYMENT FOR HONOR
1. The bill has been dishonored by non-payment
(Sec. 83.)
2. It has been protested for non-payment (Sec. 171.);
3. Payment supra protest is made by any person, even a
party thereto (Sec. 171.);
4. The payment is attested by a notarial act of honor which must be
appended to the protest or form an extension of it (Sec. 172.);
5. The notarial act must be based on the declaration made by the
payer for honor or his agent of his intention to pay the bill for
honor and for whose honor he pays. (Sec. 173.) If the above
formalities are not followed, the payment will operate as a mere
voluntary payment and the payer acquires thereby no right to
full reimbursement against the party for whose honor he pays,
(see Arts. 1236-1237, Civil Code.)
PAYMENT FOR HONOR
1. The payer for honor goes to a notary public after the
bill has been noted or protested for non-payment
and declares his intention to pay the bill for honor
and for whose honor he pays;
Notary Public
2. The declaration is recorded by the notary public
either in the protest itself as an extension of it or in
a separate paper attached thereto;
3. The payer for honor then notifies within a
reasonable time the party for whose honor he pays
that he will make the payment.
Offering to PAY FOR HONOR
Hmm… payer A or payer B ?

Sec. 174. Preference of parties offering to pay for honor.
— Where two or more persons offer to pay a bill for the
honor of different parties, the person whose payment will
discharge most parties to the bill is to be given the
preference.
In payment for honor, the person whose payment will discharge the
greatest number of parties to the bill is given the preference. The
rule is different in acceptance for honor, (see Sec. 161, last clause.)
EXAMPLE:
Kardo draws a bill payable to the order of Alyanna with Flora, as the
drawee, Alakdan, Bubbles, Cabrera, and Diana, as successive indorsers,
and Emilio, as holder. Flora (drawee) does not pay and Emilio (holder) has
duly protested non-payment. If Hidalgo offers to pay supra protest for the
honor of Cabrera while Romulo, for Alakdan, Romulo is to be preferred
as his payment will discharge Bubbles, Cabrera, and Diana, whereas
payment by Hidalgo will discharge only Diana.
ILLUSTRATION
Kardo-Drawer
PAID TO HOLDER
Alyanna -Payee
Emilio-Holder
P Hidalgo & Romulo

A Payers for Honor
I
D
Flora- Drawee
F
O
R
Diana - Indorser
Alakdan-Indorser
Cabrera-Indorser Bubbles-Indorser
Romulo is the
DISCHARGED Preferred Payer
BILL is PAID FOR HONOR
Sec. 175. Effect on subsequent parties where bill is paid for
honor. — Where a bill has been paid for honor, all parties
subsequent to the party for whose honor it is paid are
discharged, but the payer for honor is subrogated for, and
succeeds to, both the rights and duties of the holder as
regards the party for whose honor he pays and all parties
liable to the latter.
The effects of a payment for honor are as
follows:
1. All parties subsequent to the party for whose honor it is

paid are discharged;
2. The payer for honor is subrogated for, and succeeds to,

both the rights and duties of the holder as regards the
party whose honor he pays and all parties liable to the
latter;
3. If the payment is made for the honor of all parties to the

bill, the payer for honor may have recourse against all of
them.
EXAMPLE:
In the example in the preceding section, the payment supra

protest by Romulo for the honor of Alakdan will discharge
Bubbles, Cabrera, and Diana, and Romulo is subrogated to
the rights of the holder Emilio, with respect to Flora, Kardo,
Alyanna, and Alakdan.
Of course, the right of Romulo against Flora, Kardo, and

Alyanna will depend on whether or not they are liable to
Alakdan. If Romulo pays for the honor of all parties to the
bill, Flora, Kardo, Alyanna, Alakdan, Bubbles, Cabrera, and
Diana, then he may recover against all of them.
ILLUSTRATION
Kardo-Drawer
PAID TO HOLDER
SUBROGATED
SUBROGATED
Alyanna -Payee
Emilio-Holder
ROMULO
PAYER FOR
HONOR
Flora- Drawee
DISCHARGED BY PAYMENT OF ROMULO
Diana - Indorser
Alakdan-Indorser
Romulo is
subrogated to the
rights of Emilio with Bubbles, Cabrera &
respect to Flora, Diana Discharged
Kardo, Alyanna and
Alakdan
REFUSAL TO RECEIVE
PAYMENT
Sec. 176. Where holder refuses to receive payment supra
protest—Where the holder of a bill refuses to receive
payment supra protest, he loses his right of recourse
against any party who would have been discharged by such
payment.
Effect of holder's refusal to receive
payment.
In payment for honor, the holder cannot refuse the payment.

If he refuses, he cannot recover from the parties who would
have been discharged had he accepted the same. In
acceptance for honor, the holder's consent is necessary. (Sec.
161.)
Example:
In the examples under Sections 174 and 175, if E refuses to
receive payment supra protest from Romulo for the honor of
Alakdan, he loses his right of recourse against Bubbes,
Cabrera, and Diana who would have been discharged by
such payment.
ILLUSTRATION
Kardo-Drawer
PAID TO HOLDER
BUT HOLDER REFUSED

Alyanna -Payee
Emilio-Holder
ROMULO
PAYER FOR
HONOR
Flora- Drawee
SUPPOSEDLY DISCHARGED BY PAYMENT OF ROMULO
Diana - Indorser
Alakdan-Indorser
Emilio loses recourse against

Bubbles, Cabrera & Diana
PAYER FOR HONOR
Know your
rights
Sec. 177. Rights of payer for honor. — The payer for
honor, on paying to the holder the amount of the bill and
the notarial expenses incidental to its dishonor, is entitled
to receive both the bill itself and the protest.
The payer for honor is given the right to receive both

the bill and the protest obviously to enable him to
enforce his rights against the parties who are liable to
him under Section 175.
PAYMENT FOR HONOR and
ACCEPTANCE FOR HONOR
Payment for honor is distinguished from acceptance
from honor as follows:
1. In the former, the protest must be for non-payment (Sec. 171.),
while in the latter, for non-acceptance or for better security (Sec.
161.);
2. In the former, the bill is overdue, while in the latter it must not be
overdue (Sec. 161.);
3. In the former, the consent of the holder is not required nor can the
holder refuse (Sec. 176.), while in the latter, the consent of the
holder is required (Sec. 161.);
4. In the former, the acceptor is secondarily liable (Sec. 165.), while in
the latter, the acceptor is primarily liable (Sec. 62.);
5. In the former, a notarial act of honor is necessary (Sees. 162,173.),
while in the latter, it is not necessary (see Sec. 162.);
6. In the former, there can be only one payer for honor (see Sec. 174.),
while in the latter, there may be several acceptors for honor (Sec.
161.); and
7. The effects of payment for honor are those provided for in Sections
175 and 177, while the effects of acceptance for honor are those
provided for in Sections 164 and 165.
THANK YOU for listening !
We are Group VI
GROUP MEMBERS
Saligumba, Arlie
Salinas, Michael
Sanchez, Leny
Santos, Mark Gregory
Siapian, Aimeen
Please see next slide for the STUDY GUIDE
Study Guide
I. A, drawer, B, drawee, C payee, W,X,Y and Z, successive
indorsers, and D, present holder of a bill of exchange.
D protested non-payment by B but the bill was paid for
honor by E.
1. Give the effects if the payment by E was for the honor of X.

2. Give the effect if D refuses to receive payment by E for X.
3. Under the same scenario, if aside from E, F offered to pay
for honor of W, what will be the effects?
4. Has W the right to object if E prefers to pay for the honor of
X?
5. What are the rights of E as the preferred Payer for Honor?
Answer
honor by E.
1. Give the effects if the payment by E was for the honor of X.
Answer:
If E pays for the honor of X, the payment will discharge Y and Z, but E will
be subrogated to the rights and duties of D against X , including W,C, B and
A if they are liable to the latter.
Under Sec 175 of NIL, Where a bill has been paid for honor, all parties
subsequent to the party for whose honor it is paid are discharged but the
payer for honor is subrogated for, and succeeds to, both the rights and
duties of the holder as regards the party for whose honor he pays and all
parties liable to the latter.
Answer
honor by E.
2. Give the effect if D refuses to receive payment by E for X.
Answer:
If D refuses the payment of E for the honor of X, he will lose his recourse
against Y and Z.
Under Section 176 of NIL, where the holder of a bill refuses to receive
payment supra protest, he loses his right of recourse against any party who
would have been discharged by such payment.
Answer
honor by E.
3. Under the same scenario, if aside from E, F offered to pay for the honor of
W, what will be the effects?
Answer:
If F, aside from E, offers to pay for the honor of W, it will effect to the discharge of
X ,Y and Z, but F will be subrogated to the rights and duties of D against W ,
including C, B and A if they are liable to the latter.
Under Sec 175 of NIL, Where a bill has been paid for honor, all parties subsequent to
the party for whose honor it is paid are discharged but the payer for honor is
subrogated for, and succeeds to, both the rights and duties of the holder as regards
the party for whose honor he pays and all parties liable to the latter.
Answer
honor by E.
4. Has W the right to object if E prefers to pay for the honor of X?
Answer:
Yes, W has the right to object.
Under Section 174 of NIL , where two or more persons offer to pay a bill for the
honor of different parties, the person whose payment will discharge most parties to
the bill is to be given the preference.
In the present case, if the payment by E is for the honor of W , it will discharge X, Y
and Z.Whereas, if the payment is for the honor of X, it will only dischargeY and Z.
Answer
honor by E.
5. What are the rights of E as the preferred Payer for Honor?
Answer:
Section 177 of NIL provides that the payer for honor, on paying to
the holder the amount of the bill and the notarial expenses
incidental to its dishonor, is entitled to receive both the bill itself
and the protest.
The payer for honor is given the right to receive both the bill and
the protest obviously to enable him to enforce his rights against
the parties who are liable to him under Section 175.

Reported by Group Vi MLC Nil Class, 2019 Feb. Atty. Caesar Ortega (Professor)

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Reported by Group Vi MLC Nil Class, 2019 Feb. Atty. Caesar Ortega (Professor)

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REPORTED BY GROUP VI MLC NIL CLASS , 2019 FEB. ATTY.

CAESAR ORTEGA (PROFESSOR)

Payment for honor is payment made by a

This is because prior protest for non-payment is

Hmm… payer A or payer B ?

P Hidalgo & Romulo

1. All parties subsequent to the party for whose honor it is

2. The payer for honor is subrogated for, and succeeds to,

3. If the payment is made for the honor of all parties to the

In the example in the preceding section, the payment supra

Of course, the right of Romulo against Flora, Kardo, and

DISCHARGED BY PAYMENT OF ROMULO

In payment for honor, the holder cannot refuse the payment.

BUT HOLDER REFUSED

Emilio loses recourse against

The payer for honor is given the right to receive both

1. Give the effects if the payment by E was for the honor of X.

1. Give the effects if the payment by E was for the honor of X.

2. Give the effect if D refuses to receive payment by E for X.

4. Has W the right to object if E prefers to pay for the honor of X?

5. What are the rights of E as the preferred Payer for Honor?

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