VI PRESENTATION FOR PAYMENT
an action against them. Hence, only one
SECTION 70 EFFECT OF WANT OF DEMAND ON
PRINCIPAL DEBTOR
Presentment for payment the production of a bill
of exchange to the drawee for his acceptance or to
the drawee or acceptor for payment or the production
of the promissory note to the party liable for payment
of the same.
Presentment for payment consists of
1. Personal demand for payment at the proper
place
2. With the bill or note in readiness to exhibit it
if required and to received payment and
surrender it if the debtor is willing to pay.
The following are not considered sufficient
presentment
1. Mere informal talk asking for payment
without exhibition of the note
2. Demand over the telephone
Rule1: Presentment for payment is not necessary in
order to the charge the person primarily liable on the
instrument.
*Rule applicable to demand notes
Example: A draws a bill payable to B or order.
X, drawee accepts the bill which is due on
March 31, 1950. B negotiates the bill to C, C
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,
acceptor. Can F file an action against X and
hold him liable?
A: Yes because presentment for payment is
not necessary to charge the person primarily
liable on the instrument. This rule applies also
to the maker.
*Presentment for payment is not the
operative act that makes the acceptor liable
under his acceptance.
Payable at a special place
Rule2: If the instrument by its terms, payable at a
special place, and he (person primarily liable) is able
and willing to pay it there at maturity, such ability
and willingness are equivalent to a tender of
payment upon his part.
It means payable at a specified bank.
The rule is the same presentment for
payment is not necessary in order to charge
the person primarily liable. The only effect is
that if the person primarily liable is able and
willing to pay the bill, it is equivalent to the
tender of payment on his part and the holder
loses his right to recover interest due
subsequent to maturity and costs of
collection but he can still hold the
drawee/acceptor liable.
Rule3: Presentment for payment to the person
primarily liable (drawee/acceptor) is necessary in
order to charge persons secondarily liable (drawer
and indorsers).
Example: If F holder fails to make
presentment for payment for payment to X,
acceptor, the drawer A, and the indorsers B,
C, D and E are discharged and F cannot file
debtor X would be left against whom he can
enforce the bill.
Effect if not presented for payment first to
person primarily liable Persons secondarily liable
are discharged from liability and only the person
primarily liable is left to answer for payment of the
instrument.
Necessary steps to charge persons secondarily
liable in bills of exchange
1. Presentment for acceptance to the drawee
or negotiation within reasonable time from
acquisition is necessary
a. Where the bill is payable after
sight, or in any other case, where
presentment for acceptance is
necessary to fix the maturity of
the instrument;
b. Where the bill expressly
stipulates that it shall be
presented for acceptance; or
c. Where the bill is drawn payable
elsewhere than at the residence
or place of business of the
drawee.
*Aside from the three, there is no
need for presentment for
acceptance.
2. If the bill is dishonored by non-acceptance
a. Notice of dishonor by non-acceptance
must be given to persons secondarily
liable unless excused; and
b. In case of foreign bills, protest for
dishonor by non-acceptance must be
made unless excused.
3. But if the bill is accepted, or f the bill is not
required to be presented for acceptance, it
must be presented for payment to the
persons primarily liable unless excused.
4. If the bill is dishonored by non-payment
a. Notice of dishonor by nonpayment
must also be given to the person
secondarily liable unless excused;
and
b. In case of foreign bills, a protest of
dishonor by non-acceptance must be
made unless excused.
Necessary steps to charge persons secondarily
liable in promissory notes
1. Presentment for payment must be made
within the period required to the person
primarily liable unless excused; and
2. If the note is dishonored by non-payment,
notice of dishonor by nonpayment must be
given to the persons secondarily liable unless
excused.
Necessary steps to charge persons secondarily
in other cases
1. Protest for non-payment by drawee is
necessary to charge an acceptor for honor or
a referee in case of need.
2. Protest for non-payment by the acceptor for
honor is also required.
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SECTION 71 PRESENTMENT WHERE
INSTRUMENT IS NOT PAYABLE ON DEMAND AND
WHERE PAYABLE ON DEMAND
Instrument is payable at a fixed or
determinable future time (not payable on
demand)
Rule: The presentment must be made at the
date of maturity (the day it falls due).
Example: In the above example, F
must present for payment to X on
March 31, 1950. A presentment
before maturity is not proper.
Instrument is payable on demand
1. If the instrument is a note, it must be
presented for payment within a reasonable
time for issue.
Example: A makes a note payable to
B or order issued on April 1, 1950. B
negotiates to C, C to D, D to E and E
to F. The holder, F, must present the
note for payment to A, maker, within
a reasonable time after April 1, 1950,
the date of issue.
2. If the instrument is a bill, it must be
presented for payment within a reasonable
time from last negotiation.
Example: A issues a bill to B or order
on April 1, 1950. The date of its last
negotiation is December 31, 1950.
The presentment must be made
within reasonable time after
December 31, 1950, not after April 1,
1950.
Last negotiation- the last transfer for value
What constitutes reasonable time
Section 193, NIL The term is relative and
depends upon:
1. The nature of the instrument
2. The usages of business or trade if any
and
3. The facts of the particular case
SECTION 72 WHAT CONSTITUTES A
SUFFICIENT PRESENTMENT
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.
Application of Section 72 If the requisites are not
complied with, the effect is the same as if no
presentment is made i.e. the persons secondarily
liable are discharged.
Who makes presentment holder or his authorized
representative; presentment for payment of a
promissory note by bank having it for collection is
sufficient.
Time for making presentment what is a
reasonable hour on business day depends upon the
general custom at the place of the particular
transaction. Presentment for payment cannot be
made on a Sunday or a holiday.
Where presentment is made at the proper place
as defined in Section 73
To whom presentment is made the maker if a
note or the acceptor if a bill, not to the person
secondarily liable.
SECTION 73 PLACE OF PRESENTMENT
Presentment for payment is made at the proper place
1. Where a place of payment is specified in the
instrument and it is there presented;
2. Where no place of payment is specified but
the address of the person to make payment is
given in the instrument and it is there
presented.
3. Where no place of payment is specified and
no address is given and the instrument is
presented at the usual place of business of
the person to make payment;
4. In any other case if presented to the person
to make payment wherever he can be found
or if presented at his last known place of
business or residence.
Examples:
1. Place specified
A makes a note: I promise to pay at PNB,
Manila, to X or order P1000. The proper place
for making the presentment for payment is at
PNB, Manila, the place specified.
If the name of the bank is substituted,
presentment at the substituted named bank
not the original named bank is sufficient.
Where payable at a designated branch,
presentment to the principal office or at any
other branch is not sufficient.
2. Address given
Promissory note signed as follows: (Sgd) Y,
404 Regina Bldg., Manila. The prper place is
404 Regina Bldg., Manila.
3. Usual place of business; last known place of
business or residence
No place is specified not any address is given.
But the maker or acceptor resides in 12
Quiricada St. and has a business office at 240
Calvo Bldg., Manila. Either place is proper.
4. Any other place
When the holder meets the maker or
acceptor while waiting at the Escolta,
presentment may properly be made there.
SECTION 74 INSTRUMENT MUST BE EXHIBITED
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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
partnersh
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
surviving
Demand by telephone- not sufficient because himself be the personal
the perso
exhibition of the instrument is not possible. representative,
represent
presentment has been
deceased
When (actual) exhibition excused held necessary.

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

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

3
 are discharged as no presentment has been
made.
Reason: Here the accommodated party is
the person primarily liable. Hence following
the rule that failure to make presentment for
payment will not discharge the person
primarily liable, the accommodated payee-
indorser, being in effect the person primarily
liable is not discharged even if no
presentment for payment is made to the
accommodation party.
SECTION 81 WHEN DELAY IN MAKING
PRESENTMENT IS EXCUSED
Rules:
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.
Application of Section 81 What is excused here is
not the making of presentment but only the delay in
making presentment.
Excusable circumstances- those events which
could not be foreseen or which though foreseen, are
inevitable.
Excuses for delay:
1. Overwhelming calamity
2. Malignant disease
3. Interruption of trade negotiations by political
circumstances
4. War between makers and holders 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 FOR
PAYMENT IS EXCUSED
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.
Examples if implied waiver
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.
4. Where the maker, before maturity of
the note, was willingly adjudged
bankrupt partly upon his written
admission of inability to pay the
debts.
5. Where the indorsers of a note
payable at a bank has assured the
holder that it could not be paid at
maturity and knew that the maker, a
corporation, had no money to pay for
it.
6. Where the indorser assured the
holder before maturity of the note,
that a note for the same amount with
his indorsement will be given in
renewal, such assurance, if relied by
the holder.
7. When the maker on the day of
maturity of the note telephoned the
holder that he could not then pay the
note and the holder then telephoned
the maker consenting in giving
further time to the maker.
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 NON-PAYMENT
1. It is duly presented for payment and payment
is refused or cannot be obtained; or
2. Presentment is excused and the instrument is
overdue and unpaid
When payment refused, etc- requisites:
1. The instrument must be duly presented for
payment; and
2. Payment is either effused or cannot be
ontained
4
 Example: F holder makes presentment for
payment to X, acceptor and X refuses to pay or F
cannot obtain payment as although X is willing,
he has no money to pay or he fails to pay on the
date of maturity but promises to pay 5 days later.
When presentment excused- requisites:
1. Presentment for payment must be excused
2. The instrument be overdue; and
3. It is unpaid
Example: Supposes that presentment is waived
and the bill is due on March 1, 1950. The bill is
deemed dishonored when on March 2, 1950, it is
not paid even f the holder did not make
presentment. But if 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
Rule: When the instrument is dishonored by non-
payment, an immediate right of recourse to all
parties secondarily liable thereon accrues to the
holder.
Reason: 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.
Caveat: This is provided of course that notice of
dishonor us given to them otherwise they are
discharged from liability. The holder can then bring an
action against any one of them without necessity of
first bringing an action against the person primarily
liable.
But while they become principal debtors to the
holder, as regards each other, they are presumed
liable in the order they become parties to the
instrument.
SECTION 85 TIME OF MATURITY
Rule: Every negotiable instrument is payable at the
time fixed therein without grace.
Payment where instrument payable at a fixed
time
Example: If the instrument is payable on June
16, 1950, presentment must be made on that
date and no grace is to be granted.
Q: When should presentment be made if June
16, 1950 falls on a Sunday or a holiday?
A: It is payable on Monday or the succeeding
business day. Presentment therefore must be
made on that succeeding business day.
Rule where the instrument is falling due or
becoming payable on a Saturday
Must be presented for payment on the next
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
that entire day is not a holiday.
Falling due on a Saturday, meaning -- When an
instrument is payable on a Saturday, it is said to be
falling due on a Saturday
Becoming payable on a Saturday
Example: Where a bill is payable on June 16,
1950, a Friday and if it is a holiday, the bill is
said to have become payable on a Saturday
When presentment is to be made where the
instrument falls due on a Saturday or becomes
payable on a Saturday
1. Where the instrument is payable on a fixed
determinable future time
The presentment must be made on
the next succeeding business day
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
the option of the holder
SECTION 86 TIME; HOW COMPUTED
Rule: When instrument is payable at a fixed period
after date, after sight or after the happening of a
specified event, the time of payment is determined
by excluding the day from which the time is to begin
to run and by including the date of payment.
Example:
1. A draws a bill dated March 1, 1950 thus: To
X: 30 days from date, to pay B or order P1000
(Sgd) A. To compute the period, exclude
March 1 then count 30 days and include the
30th day, March 31, 1950, the date of
payment.
2. If dated January 31 and payable one month
after date, it will mature on February 28 or
February 29, if a leap year.
Caveat: On the day of payment, the party liable is
entitled to that whole day within which to make
payment.
SECTION 87 RULE WHERE INSTRUMENT IS
PAYABLE AT BANK
Rule: it is equivalent to an order of the bank to pay
the same for the account of the principal debtor
thereon.
Application of Section 87 this section applies
only where instrument is payable to a particular bank
Example: I promise to pay to B or order
P1000 at the PNB (Sgd) A. PNB may charge
the amount of the note from the account of A
without any further authority from A.
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 CONSTITUTE PAYMENT IN
DUE COURSE
1. Payment must be made at or after the date of
maturity
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 2. Payment must be to the holder; and
3. Payment must be made by the debtor in good
faith and without notice that the holders title
is defective
Where payment is not considered payment in
due course
1. Payment is made before maturity would
constitute a negotiation back to the person
primarily liable and he can renegotiate it. The
payment does not discharge the instrument
2. Payment to indorsee who is not in possession
of the instrument is not payment in due
course as he is not a holder
3. Payment to the original payee after the note
had been transferred by him to a holder in
due course does not discharge the note as he
is not a holder
4. Payment to person by the debtor who knows
such person stole it is not payment in due
course as such payment is not in good faith.
Payment must be made to the possessor of the
instrument
The party making payment must insist on the
presentment in order to make sure that it is
at the time in his possession and not
outstanding in another.
The possession of notes by the maker is
presumptive evidence that the notes are
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
2. Payment shall be effected only upon
encashment of such instruments or if upon
the fault of the creditor, they have been
impaired.
3. In case of extraordinary inflation or deflation
of the currency stipulated, the value of the
currency at the time of establishment of the
obligation shall be the basis of payment
unless there is an agreement to the contrary
Payment other than legal tender
GR: Payment will not be considered absolute
until the paper given in payment has been
itself paid
EXC: Where the parties expressly or impliedly
agree that the claim shall be discharged by
such payment.
*Taking of a renewal note is not a payment of
the original
Payment through banks
A bank to which a note is sent for collection is
the agent of the owner.
It is immaterial that the maker has requested
the holder to send the note to this bank for
collection.
Crediting of account constitutes payment