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Understanding Presentment for Payment

1) Presentment for payment is not necessary to charge the person primarily liable on an instrument like the maker or acceptor. Their liability is absolute on the date payment is due. 2) Presentment for payment is only required to charge secondary liable parties like drawers and endorsers. If an instrument is not presented to the person primarily liable, secondary parties are discharged. 3) For instruments payable at a fixed future time, presentment must be made on the due date. For demand instruments, presentment must be made within a reasonable time, defined as 6 months from issue.

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Andrei Arkov
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70 views2 pages

Understanding Presentment for Payment

1) Presentment for payment is not necessary to charge the person primarily liable on an instrument like the maker or acceptor. Their liability is absolute on the date payment is due. 2) Presentment for payment is only required to charge secondary liable parties like drawers and endorsers. If an instrument is not presented to the person primarily liable, secondary parties are discharged. 3) For instruments payable at a fixed future time, presentment must be made on the due date. For demand instruments, presentment must be made within a reasonable time, defined as 6 months from issue.

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Andrei Arkov
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd

1st slide subsequent to maturity and costs of collection but he

can still hold the drawee/acceptor liable.


PRESENTMENT FOR PAYMENT
NOTE: Demand for payment must first be made
It is the presentation of an instrument to the person
upon the person primarily liable, if the instrument is
primarily liable for the purpose of demanding and
not presented to the person primarily liable, the
receiving payment.
drawer or the indorsers are discharged from their
Manner of presentment secondary liability unless such presentment is
excused or dispensed with. (NIL., sec 79, 80)
GR: Instrument must be exhibited to the person
from whom payment is demanded; when paid, it If F holder fails to make presentment for payment to
must be delivered to the person paying it (NIL, Sec. X, acceptor, the drawer A,a nd the indorsers B, C, D
74) and E are discharged and F cannot file an action
against them. Hence, only one debtor X would be
It requires personal or face to face demand at the left against whom he can enforce the bill.
proper place, exhibiting the instrument to the maker
or acceptor from whom payment is demanded. Payable at a fixed or determinable future time:

If the instrument is not exhibited, the presentment GR: On the day it falls due (NIL, Sec. 85)
would be INEFFECTUAL as the debtor is entitled to
XPN: If the due date falls on a Saturday,
see the instrument and demand its surrender upon
presentment must be made on the next Monday.
payment.
NOTE: If presentment for payment is made before
NECESSITY OF PRESENTMENT FOR PAYMENT
maturity, it will not result to a discharge of the
Presentment for payment is not necessary in order to instrument. (NIL, Sec. 50)
charge the person primarily liable on the instrument.
Promissory note payable on demand - Within a
It is only necessary to charge persons secondarily
reasonable time after its issue.
liable—drawer and indorsers.
Bill of exchange payable on demand- Within a
A: Yes because presentment for payment is no
reasonable time after the last negotiation thereof
tnecessary to charge the person primarily liable on
(NIL, Sec. 71). NOTE: “Last negotiation” means the
theinstrument. This rule applies also to the
last transfer for value. Subsequent transfers between
maker.*Presentment for payment is not the
banks for purposes of collection are not negotiations
operative act that makes the acceptor liable under
within the meaning of
his acceptance.
Sec. 71. “Reasonable time” means not more than 6
Presentation for payment to person primarily liable
months from the date of issue. Beyond said period,
NOT necessary:
the check becomes stale and valueless and thus,
1. Liability absolute on date for payment – maker or should not be paid.
the acceptor may be sued by the holder even
without demand from the latter as soon as date of
payment has passed without the instrument being
paid.
5TH SLIDE
2. Where the instrument is payable at a special place
(e.g., at a bank, at an office but not at an What is the effect if you failed to comply with the
UNSPECIFIED PLACE e.g., like CITY OF MANILA conditions set forth in section 72?
The rule is the same presentment for payment is not It is as if there’s no presentment made hence the
necessary in order to charge the person primarily persons secondarily liable on the instrument will be
liable. The only effect is that if the person primarily discharged.
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 tr\o recover interest due

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