Capacidad de desplazamiento y levantamiento de la bomba

Seeto called at a branch of bank and presented a check payable to cash or bearer, and drawn by Kiao against PBC. After consultation with the employees, Seeto made a general and qualified indorsement of the check. He was then paid the amount of the check by bank. The check was consequently dishonored, a letter was sent to Seeto and was asked to refund the money given to him. A second letter was sent to him and he averred that case against him be deferred while he inquired about why the check was dishonored. Thereafter, he refused to pay, alleging that the account against the check was drawn had sufficient funds when the check was drawn and if the bank didn’t delay in clearing the check, there would have been sufficient funds.

The appellate court reversed the lower court in its decision. It ruled that the bank was guilty of unreasonably retaining and withholding the check, and that the delay in the presentment was inexcusable, so that respondent thereby was discharged from liability.

HELD:

Section 84 is applicable, nonetheless, it should be read in correlation with Section 186, which says that presentment should be within reasonable time.

Sec. 85. Time of maturity. - Every negotiable instrument is payable at the time fixed therein without grace. When the day of maturity falls upon Sunday or a holiday, the instruments falling due or becoming payable on Saturday are to 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 before twelve o'clock noon on Saturday when that entire day is not a holiday.

Sec. 86. Time; how computed. - When the instrument is payable at a fixed period after date, after sight, or after that 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.

Sec. 87. Rule where instrument payable at bank. - Where the instrument is made payable at a bank, it is equivalent to an order to the bank to pay the same for the account of the principal debtor thereon.

EFFECT OF FAILURE TO MAKE PRESENTMENT FOR PAYMENT—BUT SUPPOSE THAT B OR ANY SUBSEQUENT HOLDER FAILS TO MAKE A PRESENTMENT FOR PAYMENT AT THE PNB, IS A DRAWER DISCHARGED? • There is a conflict of authorities

• Agbayani’s view: A is not discharged because he is primarily liable Sec. 88. What constitutes payment in due course. - Payment is made in due course when it is made at or after the maturity of the payment to the holder thereof in good faith and without notice that his title is defective.

REQUISITES FOR PAYMENT IN DUE COURSE

1. Payment must be made at or after the date of maturity 2. Payment must be to the holder

3. Payment must be made by the debtor in good faith and without notice that his title is defective

• If payment is made before maturity, it would constitute a negotiation back to the person primarily liable and he can renegotiate it. Payment doesn’t discharge the instrument.

• Payment to indorsee who is not in possession of the instrument is not payment to a person other than the holder is at the risk of the party so paying if the person wasn’t authorized by the holder to receive payment. So also, the payment to the original payee after the note had been transferred by him to a holder in due course doesn’t discharge the note

• Payment to a person by the debtor who knows that such person stole it, is not payment in due course, as such payment is not in good faith. The maker of a note or the acceptor of a bill must satisfy himself, when it is presented for payment, that the holder traces his title through genuine indorsements, and if there is a forged indorsement, it is a nullity and no right passes by it

PAYMENT MUST BE MADE TO POSSESSOR OF INSTRUMENT

• The party making payment must insist on the presentment of the paper by the party demanding payment in order to make sure that it is at the time in his possession and not outstanding in another

• A receipt taken is no protection

• If at the time he makes payment, it is outstanding and in the hands of a holder in due course, he must pay it again

• Possession of notes by the maker is presumptive evidence

VII. NOTICE OF DISHONOR

Sec. 89. To whom notice of dishonor must be given. - Except as herein otherwise provided, when a negotiable instrument has been dishonored by non-acceptance or non-payment, notice of dishonor must be given to the drawer and to each indorser, and any drawer or indorser to whom such notice is not given is discharged.

MEANING OF NOTICE

• By notice of dishonor is meant bringing either verbally or by writing, to the knowledge of the drawer or indorser of an instrument, the fact that a specified negotiable instrument, upon proper proceedings taken, has not been accepted or hasn’t been paid, and that the party notified is expected to paid it

NECESSITY AND PURPOSE OF NOTICE

• When an instrument is dishonored by NON-ACCEPTANCE or NON- PAYMENT, notice of such dishonor must be given to persons secondarily liable, as the case may be. Otherwise, such parties are discharged

I PROMISE TO PAY F OR ORDER.

SGD. A *BCDEF

*F makes presentment for payment to A, maker, on the date of maturity. A refuses to pay.

*If F doesn’t give notice of dishonor to B, C, D and E and prove the same, they are discharged and F cannot file an action against them.

BURDEN OF PROOF

• It is upon the plaintiff who seeks to enforce the defendant’s liability upon a negotiable instrument as indorser to establish said liability by proving that notice was given to the defendant within the time and in the manner required by the law that the instrument in question had been dishonored

• Where these facts are not proven, the plaintiff doesn’t sufficiently establish the defendant’s liability

• Where there is no proof in record tending to show that the plaintiff gave any notice whatsoever to the defendant that the instrument in question had been dishonored, said plaintiff hasn’t established its cause of action

PERSONS PRIMARILY LIABLE NEED NOT BE NOTIFIED

DOES FAILURE TO GIVE NOTICE OF DISHONOR OF A PREVIOUS INSTALLMENT TO PERSONS SECONDARILY LIABLE ALSO DISCHARGE THEM ON THE SUCCEEDING INSTALLMNETS?

• It depends on whether the instrument contains an acceleration clause RULE WHERE THERE IS NO ACCELERATION CLAUSE

• Where the instrument contains no acceleration clause, failure to give notice of dishonor on previous installment doesn’t discharge drawers and indorsers as to the succeeding installments, and therefore, the holder can file an action against them for such succeeding installments, notice is given

• The reason is that each separate installment is equivalent to another note

RULE WHERE THERE IS AN ACCELERATION CLAUSE • It depends whether the clause is optional or automatic

• If it is automatic, failure to give notice of dishonor as to a previous installment will discharge the persons secondarily liable as to the succeeding installments

• If it is optional and it is not exercised, the rule would be the same as where there is no acceleration clause

EXCEPTIONS TO REQUIREMENT OF NOTICE

• The law provides for exceptions on failure to give notice would discharge drawer or indorsers

CASE DIGESTS: SECTION 89

139 ASIA BANKING CORPORATION V. JAVIER