NEGOTIABLE INSTRUMENTS NOTES

BASED ON AGBAYANIS BOOK AND ATTY. MERCADOS LECTURES

Page 97 of 190


BY: MA. ANGELA LEONOR C. AGUINALDO
ATENEO LAW 2D BATCH 2010
Sec. 71. Presentment where instrument is not payable on demand
and where payable on demand. - Where the instrument is not
payable on demand, presentment must be made on the day it falls
due. Where it is payable on demand, presentment must be made
within a reasonable time after its issue, except that in the case of a
bill of exchange, presentment for payment will be sufficient if made
within a reasonable time after the last negotiation thereof.

WHEN PAYABLE AT A FIXED OR DETERMINABLE FUTURE TIME
The presentment must be made at the date of maturity

WHEN PAYABLE ON DEMAND IN CASE OF NOTES
The time for presentment depends upon whether the instrument is a
bill or a note
If it is a note, it must be presented for payment within reasonable time
for issue
If it is a bill, it must be presented for payment within reasonable time
from last negotiation and not for issue, as in the case of notes

CASE DIGESTS: SECTION 71

132 FAR EAST REALTY INVESTMENT V. CA
166 SCRA 256

FACTS:
Private respondents approached petitioner and asked the latter to extend
to them an accommodation loan. They proposed to pay with interest.
They even gave a check, signed by Tat, drawn against Chinabank, and
signed at the back by the private respondents. They said that they will
change the check with cash after one month and if not, the check could be
presented for payment and it would be paid. The loan was actually
extended but when the check was presented for payment, it was
dishonoredthe account on which it is drawn has long been closed. The
trial courts held in favor of petitioner but this was reversed by the appellate
court by ruling that the check has passed through other hands before
reaching the petitioner and the said check wasnt presented within
reasonable time and after its issuance.

HELD:
Where the instrument is not payable on demand, presentment must be
made on the day it falls due. Where it is payable on demand, presentment
must be made within a reasonable time after issue, except that in case of a
bill of exchange, presentment for payment is sufficient if made within
reasonable time after the last negotiation thereof.

Notice may be given as soon as instrument has been dishonored and
unless delay is excused must be given within the time fixed by law.

In this case, presentment and notice of dishonor were not made within
reasonable time.

September 1960date when the check was drawn
March 1964presented to drawee bank
April 1968notice of dishonor

133 REPUBLIC V. PNB
3 SCRA 851

FACTS:
The government filed a complaint for escheat of certain unclaimed bank
deposits balances pursuant to a law, which provides that unclaimed
balancescredits, money, bullion, security or other evidence of
indebtedness of any kind, and interest with banksshall be deposited with
the government if it remains to be unclaimed within a period of 10 years of
more.

One of the banks against the complaint has been filed is First National City
Bank. Although it concedes that the government had the right to claim the
unclaimed deposit balances, it seeks to exclude some which, according to
it, are not within the purview of credits and deposits as defined in law. the
trial court held in favor of the bank, excluding from the claim the
managers checks and other demand drafts.

HELD:
Credit is a sum credited on the books of a company to a person who
appears to be entitled to it. it presupposes a creditor-debtor relationship
and may be said to imply ability, by reason of property or estates, to make
a promised payment. It is correlative to indebtedness, and that which is
due to any person, as distinguished to that which he owes.

Do demand drafts and telegraphic orders come within the purview of
credits or deposits employed in the law?

Since the demand drafts herein involved have not been presented either
for acceptance or payment, the inevitable consequence is that the bank
never had the chance of accepting or receiving them. Verily, the bank
never became a debtor of the payee concerned and as such the aforesaid