WHERE PERSON PRIMARILY LIABLE DEAD
• Presentment must be made to the executor or administrator if there is one and if he can be found
• The holder must use diligence to find the personal representative if there be one
• The person primarily liable is dead, there is a personal representative, and no place of payment indicated in the instrument—if there is a place indicated, then presentment should be done there
WHERE PERSONS PRIMARILY LIABLE ARE PARTNERS THE PRESENMENT MUST BE MADE TO ANY ONE OF THEM
WHERE PERSONS PRIMARILY LIABLE ARE JOINT DEBTORS, PRESENTMENT MUST BE MADE TO ALL OF THEM
Sec. 79. When presentment not required to charge the drawer. - Presentment for payment is not required in order to charge the drawer where he has no right to expect or require that the drawee or acceptor will pay the instrument.
Sec. 80. When presentment not required to charge the indorser. - Presentment is not required in order to charge an indorser 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 SECTION 79 AND 80
• These provisions give exceptions to the general rule that if no presentment for payment is made, the persons primarily liable are discharged
WHERE DRAWER NEED NOT BE GIVEN NOTICE
• Where A withdraws his funds from X, drawee bank, 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
• Accordingly, where F holder doesn’t make a presentment to X, A drawer would not be discharged by such failure
PRESENTMENT IS NOT REQUIRED TO CHARGE THE DRAWER IN THE FOLLOWING CASES
1. In case the check upon which payment has been stopped
2. Where the drawer’s balance is less than the amount of the check. The mere fact however that the drawer has no funds with drawee at the time he draws, doesn’t render presentment unnecessary if he still 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
3. 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
WHEN INDORSER NEED NOT BE GIVEN NOTICE
• A makes a note for the accommodation of B, payee. I promise to pay B P1000. Sgd. A BC CD DE EF
• F need not make presentment for payment to A in order to charge B indorser
• B didn’t give any value to A
• B has no reason to expect that the note will be paid upon presentment • B is considered to be the ultimately liable party since he is the
accommodated party
• With regard C and D, presentment for payment is still required
Sec. 81. When delay in making presentment is excused. - Delay in making presentment for payment is excused when the delay is caused by circumstances beyond the control of the holder and not imputable to his default, misconduct, or negligence. When the cause of delay ceases to operate, presentment must be made with reasonable diligence.
EXCUSES FOR DELAY
• Overwhelming calamity, malignant diseases, interruption of trade negotiations by political circumstances, etc.
Sec. 82. When presentment for payment is excused. - Presentment for payment is excused:
(a) Where, after the exercise of reasonable diligence, presentment, as required by this Act, cannot be made;
(b) Where the drawee is a fictitious person;
(c) By waiver of presentment, express or implied. APPLICATION OF SECTION 82
• What is excused is failure to make presentment for payment and not mere delay
WAIVER MAY BE EXPRESS OR IMPLIED IMPLIED WAIVER
• Implied waiver of presentment may be manifested by any language or conduct or any agreement between the parties reasonably calculated to lead the holder to believe that presentment is waived or to mislead or prevent him from treating the bill as he otherwise would
SUMMARY OF RULES AS TO PRESENTMENT FOR PAYMENT
1. Presentment for payment is not necessary to charge persons primarily liable
2. But it is necessary to charge a 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 d.
d. When the instrument has been dishonored by non-acceptance
Sec. 83. When instrument dishonored by non-payment. - The instrument is dishonored by non-payment when:
(a) It is duly presented for payment and payment is refused or cannot be obtained; or
(b) Presentment is excused and the instrument is overdue and unpaid.
• The instrument must be duly presented for payment and payment is either refused or cannot be obtained
WHEN PRESENTMENT IS EXCUSED • Presentment for payment is excused • Instrument is overdue
• It is unpaid
Sec. 84. Liability of person secondarily liable, when instrument dishonored. - Subject to the provisions of this Act, when the instrument is dishonored by non-payment, an immediate right of recourse to all parties secondarily liable thereon accrues to the holder.
AFTER DISHONOR, INDORSERS, ETC. ARE PRIMARILY LIABLE
• As to holder, after an instrument is dishonored by non-payment , the persons secondarily liable thereon ceases to be secondarily liable • They become principal debtors and their liability becomes the same as
that of the principal obligors—provided a notice of dishonor has been given to them
• If no notice is given, they are discharged
• If they are charged by dishonor and notice, while it is true that they become principal debtors as to the holder, yet as among themselves, persons secondarily liable are presumed liable in the order that they become parties to the instrument
CASE DIGEST: SECTION 84