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VI PRESENTATION FOR PAYMENT C, D and E are discharged and F cannot file

an action against them. Hence, only one

debtor X would be left against whom he can
enforce the bill.
PRINCIPAL DEBTOR Effect if not presented for payment first to
person primarily liable Persons secondarily liable
Presentment for payment the production of a bill are discharged from liability and only the person
of exchange to the drawee for his acceptance or to primarily liable is left to answer for payment of the
the drawee or acceptor for payment or the production instrument.
of the promissory note to the party liable for payment
of the same.

Presentment for payment consists of Necessary steps to charge persons secondarily

liable in bills of exchange
1. Personal demand for payment at the proper
place 1. Presentment for acceptance to the drawee
2. With the bill or note in readiness to exhibit it or negotiation within reasonable time from
if required and to received payment and acquisition is necessary
surrender it if the debtor is willing to pay.
a. Where the bill is payable after
The following are not considered sufficient sight, or in any other case, where
presentment presentment for acceptance is
necessary to fix the maturity of
1. Mere informal talk asking for payment the instrument;
without exhibition of the note b. Where the bill expressly
2. Demand over the telephone stipulates that it shall be
presented for acceptance; or
Rule1: Presentment for payment is not necessary in c. Where the bill is drawn payable
order to the charge the person primarily liable on the elsewhere than at the residence
instrument. or place of business of the
*Rule applicable to demand notes *Aside from the three, there is no
need for presentment for
Example: A draws a bill payable to B or order. acceptance.
X, drawee accepts the bill which is due on
March 31, 1950. B negotiates the bill to C, C 2. If the bill is dishonored by non-acceptance
to D, D to E, E to F, now holder. On April 1,
1950, the bill is still unpaid. But F failed to
make presentment for payment to X, a. Notice of dishonor by non-acceptance
acceptor. Can F file an action against X and must be given to persons secondarily
hold him liable? liable unless excused; and
b. In case of foreign bills, protest for
A: Yes because presentment for payment is dishonor by non-acceptance must be
not necessary to charge the person primarily made unless excused.
liable on the instrument. This rule applies also
to the maker. 3. But if the bill is accepted, or f the bill is not
required to be presented for acceptance, it
*Presentment for payment is not the must be presented for payment to the
operative act that makes the acceptor liable persons primarily liable unless excused.
under his acceptance.
4. If the bill is dishonored by non-payment
Payable at a special place
a. Notice of dishonor by nonpayment
Rule2: If the instrument by its terms, payable at a must also be given to the person
special place, and he (person primarily liable) is able secondarily liable unless excused;
and willing to pay it there at maturity, such ability and
and willingness are equivalent to a tender of b. In case of foreign bills, a protest of
payment upon his part. dishonor by non-acceptance must be
made unless excused.
It means payable at a specified bank.
Necessary steps to charge persons secondarily
The rule is the same presentment for liable in promissory notes
payment is not necessary in order to charge
the person primarily liable. The only effect is 1. Presentment for payment must be made
that if the person primarily liable is able and within the period required to the person
willing to pay the bill, it is equivalent to the primarily liable unless excused; and
tender of payment on his part and the holder 2. If the note is dishonored by non-payment,
loses his right to recover interest due notice of dishonor by nonpayment must be
subsequent to maturity and costs of given to the persons secondarily liable unless
collection but he can still hold the excused.
drawee/acceptor liable.
Necessary steps to charge persons secondarily
Rule3: Presentment for payment to the person in other cases
primarily liable (drawee/acceptor) is necessary in
order to charge persons secondarily liable (drawer 1. Protest for non-payment by drawee is
and indorsers). necessary to charge an acceptor for honor or
a referee in case of need.
Example: If F holder fails to make 2. Protest for non-payment by the acceptor for
presentment for payment for payment to X, honor is also required.
acceptor, the drawer A, and the indorsers B,
Who makes presentment holder or his authorized
representative; presentment for payment of a
SECTION 71 PRESENTMENT WHERE promissory note by bank having it for collection is
Time for making presentment what is a
Instrument is payable at a fixed or reasonable hour on business day depends upon the
determinable future time (not payable on general custom at the place of the particular
demand) transaction. Presentment for payment cannot be
made on a Sunday or a holiday.
Rule: The presentment must be made at the
date of maturity (the day it falls due). Where presentment is made at the proper place
as defined in Section 73
Example: In the above example, F
must present for payment to X on To whom presentment is made the maker if a
March 31, 1950. A presentment note or the acceptor if a bill, not to the person
before maturity is not proper. secondarily liable.


Instrument is payable on demand Presentment for payment is made at the proper place

1. If the instrument is a note, it must be
presented for payment within a reasonable 1. Where a place of payment is specified in the
time for issue. instrument and it is there presented;
2. Where no place of payment is specified but
Example: A makes a note payable to the address of the person to make payment is
B or order issued on April 1, 1950. B given in the instrument and it is there
negotiates to C, C to D, D to E and E presented.
to F. The holder, F, must present the 3. Where no place of payment is specified and
note for payment to A, maker, within no address is given and the instrument is
a reasonable time after April 1, 1950, presented at the usual place of business of
the date of issue. the person to make payment;
4. In any other case if presented to the person
2. If the instrument is a bill, it must be to make payment wherever he can be found
presented for payment within a reasonable or if presented at his last known place of
time from last negotiation. business or residence.

Example: A issues a bill to B or order Examples:

on April 1, 1950. The date of its last
negotiation is December 31, 1950. 1. Place specified
The presentment must be made
within reasonable time after A makes a note: I promise to pay at PNB,
December 31, 1950, not after April 1, Manila, to X or order P1000. The proper place
1950. for making the presentment for payment is at
PNB, Manila, the place specified.
Last negotiation- the last transfer for value If the name of the bank is substituted,
presentment at the substituted named bank
What constitutes reasonable time not the original named bank is sufficient.
Where payable at a designated branch,
Section 193, NIL The term is relative and presentment to the principal office or at any
depends upon: other branch is not sufficient.

1. The nature of the instrument 2. Address given

2. The usages of business or trade if any
and Promissory note signed as follows: (Sgd) Y,
3. The facts of the particular case 404 Regina Bldg., Manila. The prper place is
404 Regina Bldg., Manila.

3. Usual place of business; last known place of

SECTION 72 WHAT CONSTITUTES A business or residence
No place is specified not any address is given.
Presentment for payment, to be sufficient, must be But the maker or acceptor resides in 12
made Quiricada St. and has a business office at 240
Calvo Bldg., Manila. Either place is proper.
1. By the holder, or by some persons authorized
to receive payment on his behalf; 4. Any other place
2. At a reasonable hour on a business day;
3. At a proper place as herein defined; When the holder meets the maker or
4. To the person primarily liable on the acceptor while waiting at the Escolta,
instrument or if he is absent or inaccessible, presentment may properly be made there.
to any person found at the place where the
presentment is made.

Application of Section 72 If the requisites are not SECTION 74 INSTRUMENT MUST BE EXHIBITED
complied with, the effect is the same as if no
presentment is made i.e. the persons secondarily
liable are discharged.
Rule: The instrument must be exhibited to the made (executor or partnersh
person from whom payment is demanded and when it administrator) dissolved
is pad, must be delivered up to the party paying it.
1. if there be one; and Reason:
Unless special circumstances are shown to
2. He can be found is an age
excuse its absence
Purpose of exhibition
The holder must use
1. To determine the genuineness of the reasonable diligence to
In case of
instrument and the right of the holder to find the personal
of the ma
receive payment; and representative if any.
2. To enable him to reclaim possession upon partners,
payment. must be m
Although the indorser
Demand by telephone- not sufficient because himself be the personal
the perso
exhibition of the instrument is not possible. representative,
presentment has been
When (actual) exhibition excused held necessary.

1. When the debtor does not demand to see the

instrument but refuses on some other GR: Presentment for payment to person primarily
grounds; and liable is necessary to charge persons secondarily
2. When the instrument is lost or destroyed liable (drawer and indorser)
Effect where presentment is not accompanied EXC: When presentment for payment is not
by exhibition The presentment is not sufficient required to charge
and persons secondarily liable are discharged
1. The drawer (Section 79) where he has no
right to expect or require that the drawee or
acceptor will pay the instrument
INSTRUMENT PAYABLE AT BANK 2. The indorser (Section 80) where the
instrument was made or accepted for his
GR: Presentment must be made during banking accommodation and he has no reason to
hours expect that the instrument will be paid if
EXC: Unless the person to make the payment has no
funds there to meet it at any time during the day, in Application of Sections 79 and 80 Only the
which case presentment at any hour before the bank drawer or indorser referred in these sections is not
is closed on that day is sufficient. discharged, but all other parties secondarily liable are
relieved from their liability.
Effect if not made during banking hour --
presentment is not sufficient and persons secondarily Examples:
liable are discharged
Where presentment is not required to charge the
Example: drawer
A bill is drawn against PNB where the banking 1. Where the drawer withdraws his funds from
hours start from 9:00 AM and ends at 2:30 the drawee so that they are not sufficient to
PM. There are no banking hours in Saturdays. pay the bill, he has no right to expect or
Presentment for payment must be made require that the drawee or acceptor would
between 9:00 AM to 2:30 PM on ordinary pay the instrument. Consequently where the
days. holder does not make a presentment to the
drawee, the drawer would not be discharged
But the person to make payment has until the by this failure. But other parties secondarily
close of banking hours of the bank where the liable are discharged.
instrument is made payable in which to pay it 2. In case a check upon which payment has
and before the close of such hours, he been stopped
deposits funds there enough to pay it, a 3. Where the drawers balance is less than the
demand earlier in the day is premature. amount of the check unless the holder has
reasonable grounds to believe that the
When presentment may be made after banking
instrument will be paid, particularly when
provision has been made for payment of any
bill drawn by the drawer on the drawee.
Example: Where X has no funds sufficient to
4. Where the drawer of a bill containing the
meet the bill on the day of presentment, the
words Pay from balance had no money on
presentment may be made before 4:00 pm
deposit with the drawee but expected to
and such would be sufficient as the bill
arrange with the broker to cover drafts.
cannot be paid even if presented during
banking hours.
Where presentment not required to charge the

Example: A makes a note for accommodation

Presentment for Payment
of B, payee. B indorses to C, C to D, D to E, E
Where principal debtor To persons liable
to F. Fas
need not make presentment for
is dead (Section 76) partners (Section
payment77) to A, in order to charge B, indorser.
The reason is that as B did not give value to
To whom To his personal At any one of A,
theB has no reason to expect that the note
presentment is representative partners will be paid upon presentment. But C, D and E

are discharged as no presentment has been Waiver
Must be express or implied
Reason: Here the accommodated party is
the person primarily liable. Hence following Implied waiver may be manifested by any
the rule that failure to make presentment for language or conduct or agreement between
payment will not discharge the person the parties reasonably calculated to leas the
primarily liable, the accommodated payee- holder to believe that presentment is waived
indorser, being in effect the person primarily or to mislead or prevent him from treating the
liable is not discharged even if no bill as he otherwise would.
presentment for payment is made to the
accommodation party. Examples if implied waiver

1. Declarations, acts or conduct which

mislead the holder and induce him
SECTION 81 WHEN DELAY IN MAKING from taking the necessary steps to
PRESENTMENT IS EXCUSED make presentment.
2. Drawer A tells holder F that he will
Rules: take care of collecting the bill.
3. Holder failed to make presentment to
1. When the delay is caused by the drawee. Thereafter, the drawer
circumstances beyond the control of the paid part of the bill and promised
holder and not imputable to his default, orally t pay the rest.
misconduct or negligence. 4. Where the maker, before maturity of
2. When the cause of delay ceases to the note, was willingly adjudged
operate, presentment must be made with bankrupt partly upon his written
reasonable diligence. admission of inability to pay the
Application of Section 81 What is excused here is 5. Where the indorsers of a note
not the making of presentment but only the delay in payable at a bank has assured the
making presentment. holder that it could not be paid at
maturity and knew that the maker, a
Excusable circumstances- those events which corporation, had no money to pay for
could not be foreseen or which though foreseen, are it.
inevitable. 6. Where the indorser assured the
holder before maturity of the note,
Excuses for delay: that a note for the same amount with
his indorsement will be given in
1. Overwhelming calamity renewal, such assurance, if relied by
2. Malignant disease the holder.
3. Interruption of trade negotiations by political 7. When the maker on the day of
circumstances maturity of the note telephoned the
4. War between makers and holders countries holder that he could not then pay the
5. Suspension of commercial intercourse by note and the holder then telephoned
public enemy the maker consenting in giving
6. Occupation of country where parties reside or further time to the maker.
where instrument is payable
7. Public and positive interdictions and Summary of Rules as to Presentment for
prohibitions of state Payment
8. Impracticability of finding maker or his place
of residence 1. Presentment for payment is not necessary to
charge persons primarily liable.
SECTION 82 WHEN PRESENTMENT FOR 2. But presentment for payment to persons
PAYMENT IS EXCUSED primarily liable is necessary to charge person
secondarily liable except
1. Where after the exercise of reasonable a. As to drawer under Section 79;
diligence, presentment cannot be made; b. As to indorser under Section 80
2. Where the drawee is a fictitious person; c. When dispensed with under Section 82;
3. By waiver of presentment, express or implied and
d. When the instrument has been
Application of Section 82 What is excused is the dishonored by non-acceptance under
failure to make presentment for payment, not mere Section 151
delay under Section 81.

Reasonable diligence exercised

Reasonable diligence implies active search. In BY NON-PAYMENT
other words, the holder must take all steps
likely to discover the whereabouts of the 1. It is duly presented for payment and payment
party whom presentment is to be made. is refused or cannot be obtained; or
2. Presentment is excused and the instrument is
An insolvency of the maker even if known to overdue and unpaid
the indorser will not excuse presentment for
payment. When payment refused, etc- requisites:

Where drawee is ficititious 1. The instrument must be duly presented for

payment; and
Reason for not requiring presentment There 2. Payment is either effused or cannot be
is no one to whom presentment is to be ontained

Example: F holder makes presentment for Falling due on a Saturday, meaning -- When an
payment to X, acceptor and X refuses to pay or F instrument is payable on a Saturday, it is said to be
cannot obtain payment as although X is willing, falling due on a Saturday
he has no money to pay or he fails to pay on the
date of maturity but promises to pay 5 days later. Becoming payable on a Saturday

When presentment excused- requisites: Example: Where a bill is payable on June 16,
1950, a Friday and if it is a holiday, the bill is
1. Presentment for payment must be excused said to have become payable on a Saturday
2. The instrument be overdue; and
3. It is unpaid When presentment is to be made where the
instrument falls due on a Saturday or becomes
Example: Supposes that presentment is waived payable on a Saturday
and the bill is due on March 1, 1950. The bill is
deemed dishonored when on March 2, 1950, it is 1. Where the instrument is payable on a fixed
not paid even f the holder did not make determinable future time
presentment. But if presentment is not excused, The presentment must be made on
the bill is not dishonored by the mere fact that the next succeeding business day
the bill is overdue and unpaid. 2. Where the instrument is payable on demand
The presentment must be made on
Saturday, June 17, 1950 before 12
noon or on Monday June 19, 1950, at
SECTION 84 LIABILITY OF PERSON the option of the holder

Rule: When the instrument is dishonored by non-

payment, an immediate right of recourse to all SECTION 86 TIME; HOW COMPUTED
parties secondarily liable thereon accrues to the
holder. Rule: When instrument is payable at a fixed period
after date, after sight or after the happening of a
Reason: The persons secondarily liable on the specified event, the time of payment is determined
instrument cease to be secondarily liable after by excluding the day from which the time is to begin
dishonor of the instrument by non-payment. They to run and by including the date of payment.
become principal debtors and their liabilty is the
same as the original obligors. Example:

Caveat: This is provided of course that notice of 1. A draws a bill dated March 1, 1950 thus: To
dishonor us given to them otherwise they are X: 30 days from date, to pay B or order P1000
discharged from liability. The holder can then bring an (Sgd) A. To compute the period, exclude
action against any one of them without necessity of March 1 then count 30 days and include the
first bringing an action against the person primarily 30th day, March 31, 1950, the date of
liable. payment.
2. If dated January 31 and payable one month
But while they become principal debtors to the after date, it will mature on February 28 or
holder, as regards each other, they are presumed February 29, if a leap year.
liable in the order they become parties to the
instrument. Caveat: On the day of payment, the party liable is
entitled to that whole day within which to make


Rule: Every negotiable instrument is payable at the SECTION 87 RULE WHERE INSTRUMENT IS
time fixed therein without grace. PAYABLE AT BANK

Payment where instrument payable at a fixed Rule: it is equivalent to an order of the bank to pay
time the same for the account of the principal debtor
Example: If the instrument is payable on June
16, 1950, presentment must be made on that Application of Section 87 this section applies
date and no grace is to be granted. only where instrument is payable to a particular bank

Q: When should presentment be made if June Example: I promise to pay to B or order

16, 1950 falls on a Sunday or a holiday? P1000 at the PNB (Sgd) A. PNB may charge
the amount of the note from the account of A
A: It is payable on Monday or the succeeding without any further authority from A.
business day. Presentment therefore must be
made on that succeeding business day. Effect of failure to make presentment for
Rule where the instrument is falling due or
becoming payable on a Saturday The better view seems to be that the maker
is not discharged because he is primarily
Must be presented for payment on the next liable
succeeding business day except that
instruments payable on demand may, at the
option of the holder, be presented for
payment 12 oclock noon on Saturday when SECTION 88 WHAT CONSTITUTE PAYMENT IN
that entire day is not a holiday. DUE COURSE

1. Payment must be made at or after the date of

2. Payment must be to the holder; and 2. Payment shall be effected only upon
3. Payment must be made by the debtor in good encashment of such instruments or if upon
faith and without notice that the holders title the fault of the creditor, they have been
is defective impaired.
3. In case of extraordinary inflation or deflation
Where payment is not considered payment in of the currency stipulated, the value of the
due course currency at the time of establishment of the
obligation shall be the basis of payment
1. Payment is made before maturity would unless there is an agreement to the contrary
constitute a negotiation back to the person
primarily liable and he can renegotiate it. The Payment other than legal tender
payment does not discharge the instrument
2. Payment to indorsee who is not in possession GR: Payment will not be considered absolute
of the instrument is not payment in due until the paper given in payment has been
course as he is not a holder itself paid
3. Payment to the original payee after the note
had been transferred by him to a holder in EXC: Where the parties expressly or impliedly
due course does not discharge the note as he agree that the claim shall be discharged by
is not a holder such payment.
4. Payment to person by the debtor who knows
such person stole it is not payment in due *Taking of a renewal note is not a payment of
course as such payment is not in good faith. the original

Payment must be made to the possessor of the Payment through banks

A bank to which a note is sent for collection is
The party making payment must insist on the the agent of the owner.
presentment in order to make sure that it is
at the time in his possession and not It is immaterial that the maker has requested
outstanding in another. the holder to send the note to this bank for
The possession of notes by the maker is
presumptive evidence that the notes are Crediting of account constitutes payment
paid. But the payees possession of the
instrument raises the presumption that they
are not paid.

Medium of payment

1. Must be in the currency stipulated or if not

possible, the currency which is legal tender in
the Philippines