Discharge of Negotiable Instrument

CHAPTER 8: DISCHARGE OF NEGOTIABLE INSTRUMENT

Section 119. Instrument, how discharged. – a negotiable instrument is discharged:

(a) By payment in due course by or on behalf of the principal debtor;

(b) By payment in due course of the accommodated, where the instrument is made or accepted for accommodation;

(c) By the intentional cancellation thereof by the holder;

(d) By any other act which will discharge a simple contract for the payment of money;

(e) When the principal debtor becomes the holder of the instrument at or after maturity in his own right.

Section 120. When person secondarily liable on, discharged. – a person secondarily liable on the instrument is discharged:

(a) By any act which discharges the instrument;

(b) By the intentional cancellation of his signature by the holder;

(c) By the discharge of the prior party

(d) By the valid tender of payment made by a prior party;

(e) By a release of the principal debtor, unless the holder’s right of recourse against the party secondarily liable is expressly reserved;

(f) By an agreement binding upon the holder to extend the time of payment, or to postpone the holder’s right to enforce the instrument, unless made with the assent of the party secondarily liable, or unless the right of recourse against such party is expressly reserved.

CHAPTER 8: DISCHARGE OF NEGOTIABLE INSTRUMENT

Section 119. Instrument, how discharged. – a negotiable instrument is discharged:

(f) By payment in due course by or on behalf of the principal debtor;

(g) By payment in due course of the accommodated, where the instrument is made or accepted for accommodation;

(h) By the intentional cancellation thereof by the holder;

(i) By any other act which will discharge a simple contract for the payment of money;

(j) When the principal debtor becomes the holder of the instrument at or after maturity in his own right.

Section 120. When person secondarily liable on, discharged. – a...