VI – PRESENTATION FOR PAYMENT Necessary steps to charge persons secondarily liable in
bills of exchange –
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 an action against them. Hence, only one
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.
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.
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.
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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
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 – 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
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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
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

Example: Application of Sections 79 and 80 – Only the drawer or

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.
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 –

But the person to make payment has until the close of 1. Where the drawer withdraws his funds from the
banking hours of the bank where the instrument is drawee so that they are not sufficient to pay the bill,
made payable in which to pay it and before the close he has no right to expect or require that the drawee or
of such hours, he deposits funds there enough to pay acceptor would pay the instrument. Consequently
it, a demand earlier in the day is premature. where the holder does not make a presentment to the
drawee, the drawer would not be discharged by this
When presentment may be made after banking hours failure. But other parties secondarily liable are
discharged.
Example: Where X has no funds sufficient to meet the 2. In case a check upon which payment has been
bill on the day of presentment, the presentment may stopped
be made before 4:00 pm and such would be sufficient 3. Where the drawer’s balance is less than the amount of
as the bill cannot be paid even if presented during the check unless the holder has reasonable grounds to
banking hours. 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
Presentment for Payment from balance” had no money on deposit with the
Where To persons To joint drawee but expected to arrange with the broker to
principal liable as debtors cover drafts.
debtor is partners (Section
dead (Section (Section 77) 78) Where presentment not required to charge the indorser
76)
Example: A makes a note for accommodation of B,
To whom To his At any one of GR: Must payee. B indorses to C, C to D, D to E, E to F. F need not
presentmen personal the partners be made to make presentment for payment to A, in order to
t is made representativ even if their ALL of charge B, indorser. The reason is that as B did not give
e (executor or partnership them. value to A, B has no reason to expect that the note will
administrator) has been be paid upon presentment. But C, D and E are
– dissolved. discharged as no presentment has been made.

1. if there Reason: Each EXC: Unless Reason: Here the accommodated party is the person
be one; partner is an one of them primarily liable. Hence following the rule that failure
and agent of the is duly to make presentment for payment will not discharge
2. He can be partnership. authorized the person primarily liable, the accommodated payee-
found by the indorser, being in effect the person primarily liable is
others for not discharged even if no presentment for payment is
In case of the made to the accommodation party.
The holder death of one purpose,
must use of the makers presentmen
reasonable who are t to him
diligence to partners, would be SECTION 81 – WHEN DELAY IN MAKING PRESENTMENT IS
find the presentment sufficient. EXCUSED
personal must be made
representative to the Rules:
if any. surviving
partner, not 1. When the delay is caused by circumstances
Although the to the beyond the control of the holder and not
indorser personal imputable to his default, misconduct or
himself be the representativ negligence.
personal e of the 2. When the cause of delay ceases to operate,
representative, deceased presentment must be made with reasonable
presentment partner. diligence.
has been held
necessary. Application of Section 81 – What is excused here is not the
making of presentment but only the delay in making
presentment.
GR: Presentment for payment to person primarily liable is
necessary to charge persons secondarily liable (drawer and Excusable circumstances- those events which could not be
indorser) foreseen or which though foreseen, are inevitable.

EXC: When presentment for payment is not required to Excuses for delay:
charge –
1. Overwhelming calamity
1. The drawer (Section 79) – where he has no right to 2. Malignant disease
expect or require that the drawee or acceptor will pay 3. Interruption of trade negotiations by political
the instrument circumstances

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 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 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
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.
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 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 o’clock 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
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
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 payee’s
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