CHAPTER VI : PRESENTMENT FOR PAYMENT (REVIEWER)

SECTION 70

WHAT IS PRESENTMENT FOR PAYMENT?

> The presentation of an instrument to the person [rimarily liable for the purpose of demanding and
receiving payment.

PRESENTMENT FOR PAYMENT AGAINST PRIMARILY LIABLE

>Presentment for payment is not necessary to charge the party primarily liable.

Example:
R issued a bill payable to P or order, E is the drawee accepts the bill which is due on April 1 2020, P
indorse it to A, A is now holder. The bill still not paid on May 1 2020, and A fail to make a presentment
for payment to E, can A still make E liable?

YES, because the presentment for payment against primarily liable is not necessary, therefore even if A
did not make a presentment for payment, A can make E still liable for E is a party primary liable and E
liablity is absolute.

PRESENTMENT FOR PAYMENT AGAINST SECONDARILY

>Presentment for payment is necessary to charge the party secondary liable.

Example:
A a holder failed to make a presentment for payment to E,the acceptor, the Drawer, R and indorser if
there are other indorsers they are discharged and F cannot file against them, E the acceptor the only one
he can enforce the bill.

SECTION 71

DATE OF PRESENTMENT
1. If instrumrnt is payable at a fixed or determinable future time, presentment must be made on the
date it falls due without period of grace. ( 85)

Example: In the above example A must present the present of payment to E on April 1 2020.

Because presentment for payment before maturity is not effective

2. the instrument is payable on demand,

• Promissory note – presentment for payment must be made within a reasonable time after
issuance.
•
Example:
M make a promissory note to P or order issued on April 1 2020, then P indorse it to A. The holder, A
must present the presentment for payment to M, maker, within a reasonable time after April 1, 2020 the
date of issue.
 • Bill of exchange – Presentment for payment must be made within a reasonable time after the
last negotiation.

Example :
R draw a bill to P or order on April 1, 2020. The date of its last negotiation is December31, 2020, the
presentment must be made with reasonable time after December 31 2020, not after April 1 2020.

Last Negotiation – Last transfer for value

SECTION 72

Presentment for payment, to be sufficient, must be made -

1.By the holder, or by some persons authorized to receive payment on his behalf
2. At a reasonable hour on a business day
3. At a proper place as herein defined
4. To the person primarily liable on the instrument or if he is absent or inaccessible, to any person
found at the place where the presentment is made

1. Pesentment for payment must be made to the primary party

2. If the bill of exchange or check is payable on demand, the presentment must be made to the drawee
although he is not liable on the bill
3.If he is absent or inaccessible, to any person found at the place where presentment is made

SECTION 73

Presentment for payment is made at the proper place -

1. Specified Place
Example:
M makes a note: I promise to pay at BDO, Caloocan to P or order P5,000. The proper place for making
presentment for payment is at the BDO, Caloocan, the place specified in the instrument.

2. Address Given
Example:
Promissory note signed as follows: (sgd) P, 26 L. Bustamante St. Caloocan City.

3. Usual place of business ; Last known place of Business or residence

Example:
No place is specified not any address is given . But the maker resides in 26 L. Bustamante St. Caloocan
and has an office at UCC south, EDSA Campus. Either place is proper.

4. Any other place

Example:
When the holder meets the maker or acceptor while waiting at the SM Manila, Presentment for
payment may properly made there.
SECTION 74 INSTRUMENT MUST BE EXHIBITED

General Rule: The instrument must be exhibited to the person from whom payment is demanded and
when it is pad, must be delivered up to the party paying it. Unless special circumstances are shown to
excuse its absence

PURPOSE OF EXHIBITION
1. To determine the genuineness of the instrument and the right of the holder to receive payment; and
2. To enable him to reclaim possession upon payment.

DEMAND BY TELEPHONE
not sufficient because exhibition of the instrument is not possible.

When (actual) exhibition excused –

1. When the debtor does not demand to see the instrument but refuses on some other grounds; and
2. When the instrument is lost or destroyed

Effect where presentment is not accompanied by exhibition

>The presentment is not sufficient and persons secondarily liable are discharged

SECTION 75 – PRESENT FOR PAYMENT WHERE INSTRUMENT PAYABLE AT BANK

General Rule: Presentment must be made during banking hours

If payable at a bank, presentment for payment must be made during banking hours, unless the person to
make payment has no funds there to meet it at any time during the day, in which case presentment at
any hour before the bank is closed on the day is sufficient.

1. During Banking Hours – Person make payment has fund in bank, presentment must be made during
banking hours. Outside banking hours is not sufficient.

2. Any time during the Day – person make pay has no fund in the bank meet payment any time during
the day, presentment at any hour before the bank is closed is sufficient to hold person secondarily
liable.

3.Before close of banking hours – If before the close of such hours he deposits funds to the bank
enough to pay the instrument.

A demand earlier in a day is premature,

The instrument is not considered dishonored though payment has been refused earlier in the day.

SECTION 76 – WHERE THE PRINCIPAL DEDTOR IS DEAD

Present for payment may be made to - To his personal representative (executor or administrator) –
1. if there be one; and
2. He can be found
The holder must use reasonable diligence to find the personal representative if any.
Although the indorser himself be the personal representative, presentment has been held necessary.
SECTION 77 – TO PERSONS LIABLE AS PARTNERS

At any one of the partners even if their partnership has been dissolved.
Reason: Each partner is an agent of the partnership. In case of death of one of the makers who are
partners, presentment must be made to the surviving partner, not to the personal representative of the
deceased partner.

SECTION 78 – PRESENTMENT TO JOINT DEBTORS

GR: Must be made to ALL of them.

EXC: Unless one of them is duly authorized by the others for the purpose, presentment to him would
be sufficient.

SECTION 79 – WHEN PRESENTMENT NOT REQUIRED IN ORDER TO CHANGE THE

DRAWER.

1. where he has no funds with the drawee unless arrangement has been made for payment of the bill
2. where the drawer of a check has stopped payment thereof
3. where the drawer of a check

SECTION 80 – WHEN PRESENTMENT NOT REQUIRED TO CHARGE THE INDORSER

Refers only to an indorser for whose accomocation an instrument is made or accepted.

Accommodation party does not discharge even if no presentment for payment is made to the maker or
acceptor.

EXAMPLE:

M make a note Accommodation to P, P indorse it to A, A to B, B to C, C need not to make presentment

for payment to M to charge P . the reason is that as P did not give value to M, P has no reason to expect
that the note will be paid upon presentment. But A and B are discharge because no presentment for
payment.

The reason for the rule is that the accommodated payee – indorser is the real debtor and not a maker or
acceptor, but the acceptor or maker is not discharged even if no presentment for payment is made to the
maker or acceptor who, in subsstance, is a surety for debt. 0.

SECTION 81 – WHEN DELAY IN MAKIN PRESENTMENT IS EXCUSED

1. When the delay is caused by circumstances beyond the control of the holder and not imputable to his
default, misconduct or negligence.
2. When the cause of delay ceases to operate, presentment must be made with reasonable diligence.

What is excused here is not the making of presentment but only the delay in making presentment.
EXAMPLE OF EXCUSES FOR DELAY;

1. Overwhelming calamity
2. Malignant disease
3. Interruption of trade negotiations by political circumstances
4. War between maker’s and holder’s countries
5. Suspension of commercial intercourse by public enemy
6. Occupation of country where parties reside or where instrument is payable
7. Public and positive interdictions and prohibitions of state
8. Impracticability of finding maker or his place of residence

SECTION 82 – WHEN PRESENTMENT MAY BE DISPENSED

1. Where after the exercise of reasonable diligence, presentment cannot be made;

2. Where the drawee is a fictitious person;
3. By waiver of presentment, express or implied

Application of Section 82 – What is excused is the failure to make presentment for payment, not mere
delay under Section 81.

Reasonable diligence exercised

Reasonable diligence implies active search. In other words, the holder must take all steps likely to
discover the whereabouts of the party whom presentment is to be made.
An insolvency of the maker even if known to the indorser will not excuse presentment for payment.

Where drawee is ficititious

Reason for not requiring presentment – There is no one to whom presentment is to be made.

Waiver

Must be express or implied

Implied waiver may be manifested by any language or conduct or agreement between the parties
reasonably calculated to leas the holder to believe that presentment is waived or to mislead or prevent
him from treating the bill as he otherwise would.

EXAMPLE:
1. Declarations, acts or conduct which mislead the holder and induce him from taking the necessary
steps to make presentment.
2. Drawer A tells holder F that he will take care of collecting the bill.
3. Holder failed to make presentment to the drawee. Thereafter, the drawer paid part of the bill and
promised orally t pay the rest.

Summary of Rules as to Presentment for Payment

1. Presentment for payment is not necessary to charge persons primarily liable.
2. But presentment for payment to persons primarily liable is necessary to charge person secondarily
liable except –
a. As to drawer under Section 79;
b. As to indorser under Section 80
c. When dispensed with under Section 82; and
d. When the instrument has been dishonored by non-acceptance under Section 151

SECTION 83 - WHEN INSTRUMENT DISHONORED BY NONPAYMENT

1. The instrument must be duly presented for payment; and

2. Payment is either effused or cannot be obtained

Non payment upon due presentation

(a) That the instrument is duly presented for paymjent to the party
(b) That payment is either refused or cannot be obtained.

EXAMPLE: A is the holder then makes a presentment for payment to E, Drawee or Acceptor, then E
refuses to pay, as long as it is not paid although the primary willing to pay. Thus, there is already
dishonor where, on presentment, the maker promise to pay 5 days later.

Non Payment without Presentation

1. Presentment for payment must be excused

2. The instrument be overdue; and
3. It is unpaid

EXAMPLE: that the presentment is waived and the note or the bill was dated April 1 2020, it is
dishonored on April 2, 2020 even if the holder did not make presentment, But is presentment is not
excused, the bill is not dishonored by the mere fact that the bill is overdue and unpaid.

SECTION 84 - LIABILITY OF PERSON SECONDARILY LIABLE

When the instrument is dishonored by non-payment, an immediate right of recourse to all parties
secondarily liable thereon accrues to the holder.

1. The persons secondarily liable on the instrument cease to be secondarily liable after dishonor of the
instrument by non-payment. They become principal debtors and their liabilty is the same as the original
obligors.

2. The right to recourse to all parties secondarily liable. Means right to holder to enforce the liabilities
of said parties as define in section 61,65,66. The holder can then bring an action against any one of
them without necessity of first bringing an action against the person primarily liable.

SECTION 85 - TIME OF MATURITY

Rule: Every negotiable instrument is payable at the time fixed therein without grace.

Example: An instrument is payable on April 1, 2020, Presentment must be made on the date and no
grace is to be granted.
If grace day has been granted – If grace days has been granted for example above it present (3) grace
day, so presentment must be made on April 4, 2020

On a Sunday or a Holiday – Presentment cannot made on sunday or a holiday.

Example: above example if the date presentment for payment the April 1 2020 and April 4 2020 falls
on Sunday or a Holiday it is payable on Monday or any of succeeding business day.

On Saturday – same if the instrument falls on saturday, it should be present on next succeeding
business hours.

Becoming payable on Saturday – If the insstrument is payable on friday and it is holiday, the said
instrument is payable on saturday.

On Demand - If the instrument is payable on demand , it may ba presentd for payment before 12:00
noon on saturday or on monday, at the option of the holder .

SECTION 86 – TIME: HOW COMPUTED

Computation of time of maturity.

Count from the day following the date from which the time is to run (even if the date is said to be a
holiday) and include the last day of the period.
EXAMPLES:
(1) AFTER DATE
> Instrument dated on April 1, 2020 and payable 3 months after date, the due is July 1 2020.
(2) AFTER SIGHT
> Instrument dated on April 1, 2020 and payable 3 months after sight, on April 5 2020 is the date of
acceptance , the due date is July 5, 2020.
(3) Instrument dated on January 31, and payable 1 month aster date will mature on February 28 or
February 29 if it is leap year
(4) If an instrument is payable 10 days after April 10, 2020, the date of maturity is April 20, 2020. By
Counting from April 11, 2020 or Adding 10 days from April 10 2020

SECTION 87 – RULE WHERE INSTRUMENT PAYABLE AT BANK.

This section applies only where instrument is payable to a particular bank

Example: “I promise to pay to P or order P1000 at the PNB (Sgd) M.” PNB may charge the amount of
the note from the account of M without any further authority from M.

Effect of failure to make presentment for payment

The better view seems to be that the maker is not discharged because he is primarily liable.

SECTION 88 – WHAT CONSTITUTES PAYMENT IN DUE COURSE.

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

2. Payment must be to the holder; and
3. Payment must be made by the debtor in good faith and without notice that the holder’s title is
defective
Payment must be made by the debtor in good faith and without notice that the holder title is defective.

EXAMPLE
M issue a note payable to P or order. The notes is indorsed to A then B obtain it to A through fraud by B
and B present it to M on maturity of payment

If M had no notice of the fraud, payment by him discharge the note. This would not be so if the
payment was made before maturity of M had notice of fraud when he made the payment.