PRESENTMENT FOR PAYMENT

is the presentation of the instrument to the persons primarily liable for

the purpose of demanding and receiving payment.
[Sec 70]
When necessary: to charge persons secondarily liable (drawer/indorsers)
BUT: presentment rst to persons primarily liable
!""!#T $" %&T '(!)!%T!*: drawer/indorsers are *$)#+,(-!*
from their secondary liability. (-en (ule)
Exceptions: (.) drawer has no right to e/pect or re0uire that the
drawee/acceptor will pay the instrument(e/. +e has no fund/account with
the drawee/acceptor) 1)ec. 2345
(6) instrument was made or accepted for the
indorser7s accommodation (indorser is the accommodated party and at the
same time the principal debtor) 1)ec 8945
(:) after e/ercise of reasonable diligence presentment
as re0uired by this ,ct cannot be made 1)ec 86(a)45
(;) drawee is a ctitious person 1)ec 86(b)45
(<) !/press or implied Waiver of presentment 1)ec
86(c)4
(=) Bill is dishonored by non>acceptance 1)ec .<.4
Note: )ec 23? 89 : presentment e/cused
)ec 86? .<. : presentment dispensed with

When %&T necessary: to charge persons primarily liable (ma@er/acceptor)
(.) Aiability is absolute on date for payment5 therefore? the holder
can sue the ma@er as soon as the date for payment has passed without
the instrument being paid.
(6) $nstrument payable at a special place and he is able and willing
to pay it there5 e0uivalent to a tender and oBer of payment5 eBect: he is
not considered in delay (in case the instrument is unpaid and overdue)?
therefore he is not liable for costs and interests subse0uently accruing.
(:) !ven if it is re0uired by terms of the instrument.
[Sec 71]
$nstrument %&T payable on demand: presentment on the day it falls due5
$nstrument payable on demand:
a. ('romissory %ote): presentment within a reasonable time after its issue5
b. (Bills of !/change): presentment within reasonable time after the last
negotiation of the instrument.
[Sec 72]
What constitutes sufcient pa!ent (a"" e"e!ents !ust concu#)
.. Cade by the holder/person authoriDed to (!#!$E! payment5
6. ,t a reasonable hour within a business day5
:. ,t a proper place as herein dened5 ,%*
;. To the person primarily liable/if absent or inaccessible? to any person found
at the place where presentmade is made.
[Sec 7$]
What constitutes p#ope# p"ace (in o#%e#)
.. 'lace specied in the instrument? and it is there presented5 or if none
6. ,ddress of the person to ma@e payment5 or if none5
:. Usual place of business or residence of the person to ma@e payment5 or if
none
;. Wherever he can be found? or at his last @nown address.
[Sec 7&]
Ealid presentment re0uires pe#sona" o# 'ace(to('ace %e!an%) at the
proper place? e/hibiting the instrument to the ma@er/acceptor from whom
payment is demanded.
When paid? the instrument must be delivered up to the party paying it.
[Sec *1+
When %e"a o' p#esent!ent e,cuse%-a"so 'o# acceptance 'o#
hono#+
When caused by circumstances beyond the control of the holder5 ,%*
Without his default? misconduct? or negligence
Note: When reason for delay ceases to operate? presentment must be
made within a reasonable time.

Su!!a# Ru"es as to P#esent!ent 'o# Pa!ent
.. %ot necessary>'CA5 necessary>')A 1)ec 294
6. %ot necessary>')A under )ecs 23? 89?86?.<.
[Sec *$]
When inst#u!ent is %ishono#e% . non(pa!ent
a. *uly presented but (!"U)!* of ',FC!%T #,%%&T B! &BT,$%!*
b. (.) !G#U)!* and instrument is (6) &E!(*U! and (:) U%',$* a"" $
!ust concu#.
Note/ if the presentmade is not made and it is not e/cused? there is no
dishonor even though the instrument is overdue and unpaid.
[Sec *0]
What constitute PAYMENT 1N 23E 4O3RSEH (a"" $ !ust concu#+
.. Cade at maturity? or a'te# maturity to the ho"%e# thereof5
6. $n good faith(of the ma@er/acceptor)5 ,%*
:. Without notice that his title is defective
NOT14E OF 21S5ONOR
[Sec *0]
To whom must be givenH
.. To the drawer5 ,%*
6. To each indorser

!Bect if not given: *ischarges one of liability but he is still liable for breach
of warranties pertaining to the instrument 1)ec =< and ==4
When inst#u!ent is consi%e#e% %ishono#e%
.. $f it is not accepted when presented for acceptance5
6. $f it is not paid when presented for payment5
:. $f presentment is e/cused or waived and the instrument is past due and
unpaid.
[Sec 00)01)02]
%otice may be given by:
.. The holder5
6. &n behalf of the holder5
!Bect: it inures to the benet of all subse0uent holders and all prior parties
who have a right of recourse against the party to whom notice is given
1)ec 364
:. ,ny party to the instrument who might be compelled to pay the holder?
and upon ta@ing it up? would have a right to reimbursement from the party
to whom notice is given.
!Bect: $nures to the benet of the holder and all parties subse0uent to the
party to whom notice is given.
;. By an agent either in his own name or in the name of the party entitled to
give notice. 1)ec 3.4
%ote: ,-!%Tauthority to receive notice %!#!)),(F
authority to give notice %&T %!#!)),(F
%otice to 'artnersany one of them
%otice to Ioint 'artieseach of them
%otice to Ban@ruptparty himself or his trustee ot assignee
T1ME F16E2 FOR 7181N7 NOT14E-a"so 'o# p#esent!ent 'o# pa!ent
to accepto# 'o# hono#(10$)10&+
[Sec 10$) 10&) 107]
()ec .9:) When parties reside in the same place and notice is given at the:
.. business place before the close of the business hour on the day following
6. residence before the usual hours of rest on the day
:. mail deposited in the post oJce in time to reach him in the usual course
on the day following.
()ec .9;) *iBerent place:
.. by mail must be deposited in time to go by mail the day following the
day of dishonor
if there be no mail at a convenient hour on that day? by the
ne/t mail thereafter
6. otherwise than by mail(e/.personal messenger) recipient shall receive
the notice not later than the time he would receive it had it been mailed.
()ec .92) Time of %otice to )ubse0uent 'arties:
same time as that of antecedent parties
What constitute 2ue Notice [Sec 109]
.. The notice of dishonor is *UAF ,**(!))!*5 ,%*
6. *!'&)$T!* $% T+! '&)T &""$#!
post oJce
any branch of post oJce
any letter bo/ under the control of the post oJce
'A,#! W+!(! %&T$#! CU)T B! -$E!%
.. ,ddress added in his signature5
6. $f none? either to post oJce nearest his place or that where he is
accustomed to receive his letters5
:. !ither at his residence or business place(if both are not in the same place)5
;. 'lace where he is soKourning
%ote: When protest is waived? presentment and notice of dishonor are also
deemed waived
When %e"a o' :i;in: notice is e,cuse% 1sa!e as Sec *1]
When Notice to 2#a<e# Not Re=ui#e%
.. *rawer and drawee are the same person5
6. *rawee is a ctitious person5
:. *rawee is a person not having capacity to contract5
;. *rawer is the person to whom the instrument is presented for payment5
<. *rawer has no right to e/pect or re0uire that the drawee or acceptor will
honor the instrument5
=. *rawer has countermanded payment.
When Notice to 1n%o#se# Not Re=ui#e%
.. $ndorser was aware of L6 and L: above5
6. The indorser is the person to whom the instrument was presented5
:. $ndorser is the accommodated party(and the principal debtor)
E>ect <he#e notice o' non(acceptance a"#ea% :i;en
1? $f subse0uently accepted? holder must present the instrument for payment
upon maturity5
2? $f not paid? holder must give the subse0uent notice of dishonor.
E>ect o' o!ission to :i;e notice o' non(acceptance . the
p#e;ious ho"%e#
, holder in due course(subse0uent holder) is not preKudiced. +e may still
present the instrument to the drawee for acceptance and notify the drawer
and indorsers if acceptance is refused.
When P#otest Re=ui#e%
.. "oreign bills of e/change
6.
)UCC,(F &" (UA!) ,) T& %&T$#! &" *$)+&%&(
.. Ai@e presentment for payment? notice of dishonor is not necessary to
charge the persons primarily liable but is necessary to charge persons
secondarily liable5
6. When notice of dishonor %&T necessary:
a. %otice is waived5
b. 'rotest is waived5
c. %otice is dispensed with5
d. ,s to drawer under )ec ..;5
e. ,s to indorser under )ec ..<5
f. Where due notice of dishonor by non>acceptance has been given under
)ec ..=5 and
g. ,s to holder in due course? without notice of dishonor by non>acceptance?
subse0uent to the omission to give notice under )ec ..2.
PROTEST
$s the formal instrument e/ecuted usually by
(.) a notary public? or
(6) by any respectable resident of the place where the bill was dishonored?
in the presence of two or more credible witness
certifying that the legal steps necessary to / the liability of the
drawee and the indorsers have been ta@en
Cade on the day of its dishonor? unless delay is e/cused
,t the place where the instrument is dishonored? if not thereat? at the place
where it is e/pressed to be payable
P#otest 'o# .ette# secu#it
'rotest before maturity where acceptor has been adKudged a ban@rupt or
insolvent? or has made an assignment for the benet of his creditors
When necessa#/
.. $n case of a foreign bill of e/change5
6.
Reasons 'o# #e=ui#in: p#otest in case o' a 'o#ei:n .i"" o' e,chan:e
1? $t ma@es for uniformity in international transactions because most
countries re0uire it5
2? $t furnishes authentic and satisfactory evidence of dishonor to the drawer
who? from his residence abroad? would e/perience diJculty in verifying the
matter and thus be compelled to rely on the presentation of the holder.
5o< !a%e/
.. Cust be anne/ed to the bill or must contain a copy thereof5
6. Cust be under the hand and seal of the notary ma@ing it5
:. Cust specify the matters enumerated as follows:
a. Time and place of presentment5
b. The fact that presentment was made and the manner thereof5
c. The cause or reason for protesting the bill5
d. The demand made and the answer given? if any? or the fact that the
drawee or acceptor cannot be found.
When p#otest is %ispense% <ith/ same as that of presentment and
notice of dishonor
*UAF %&T!*> means written by the notary public on his logboo@ or on the
instrument
%ote: formal paper may subse0uently be prepared after it has been duly
noted as of the date of noting.
P#otest an% Notice o' 2ishono# %istin:uishe%
PROTEST NOT14E OF
21S5ONOR
Whe#e
#e=ui#e%
foreign bill any negotiable
instrument
Fo#! Written Eerbal or written
Scope $ncludes
presentment?
notice of
dishonor? and all
the steps
accompanying
dishonor
Aimited to notice of
dishonor only
Ma%e . %otary public or
any respectable
resident where
the instrument
was dishonored in
the presence of
two or more
credible witnesses
By a party or his
agent
Whe#e ,t the place of%ot essential
!a%e dishonor
When
!a%e
&n the day of
dishonor
Within the time
prescribed
21S45AR7E
Ne:otia."e 1nst#u!ents a#e %ischa#:e% . [Sec 110]/
a. 'ayment in due course by or on behalf of the principal debtor5
b. 'ayment in due course by the accommodated party5
c. $ntentional cancellation thereof by the holder5
how cancellation is done:
.. By writing the word M#ancelledN or M'aidN on the face of the instrument
6. $nstrument is torn up? burned? or mutilated
d. ,ny act which discharges the instrument under ,rt. .6:. of the #ivil
#ode:
.. Payment or performance5
6. @oss of the thing due5
:. Remission of the debt or condonation5
;. Merger of the rights of the creditor and debtor or confusion5
<. 4ompensation5
=. Novation5
2. &thers: annulment? rescission? fulllment of a resolutory condition and
prescription
e. The principal debtor reac0uires the instrument in his own right at or after
the date of maturity
Note/ $f reac0uisition is made before maturity? the instrument can be re>
negotiated. Therefore? the reac0uisition of the principal debtor before
maturity does not operate to discharge the instrument.
Metho%s o' %ischa#:e o' secon%a# pa#ties
1? Under )ec ..3 above5
2? 5o"%e# intentiona"" cance"s the si:natu#e of parties secondarily
liable on the instrument as if he has never been a party thereto under
)ec.;8
)ec.;8>When holder may stri@e out indorsement not necessary to his
title and the indorser whose indorsement is struc@ out? and all indorsers
subse0uent to him? are thereby relieved from liability on the instrument.
a. , bearer instrument may be negotiated by mere delivery. $n case it is
indorsed? it remains a bearer instrument and may be further negotiated by
*!A$E!(F.
b. ,n order instrument may be negotiated only by the indorsement of the
payee completed by delivery. )pecial $ndorsement is necessary for further
negotiation. Blan@ $ndorsement (the last indorsement) makesthe order
instrument a bearer instrument and may be negotiated by mere delivery.
+ence? the )pecial $ndorsements are not necessary to the holder7s title. +e
may therefore stri@e out the signature of the special indorser. $n eBect? the
special indorser and all indorsers subse0uent to him are relieved of their
liabilities to the instrument.
$? By the discharge of a prior party by act o' ho"%e#- not . ope#ation o'
"a<+5
&? Ealid tender of payment made by a prior party5
A? By release of the principal debtor . the act o' the ho"%e#- not .
ope#ation o' "a<+?
(!,)&%: With the release of the principal debtor? subse0uent parties lose
their right of recourse against him.
)UB)!OU!%T ',(T$!) ,(! (!A!,)!* 3N@ESS: +older reserved his right
of recourse against the said subse0uent parties.
$n eBect? there is an implied reservation by the subse0uent parties of their
right of recourse against the principal debtor.
E>ect o' #eac=uisition . p#io# pa#t
1? The reac0uirer (who paid for the instrument)? for the most part? is remitted
to his former position? and conse0uently? he may stri@e out his own and all
subse0uent indorsements as they are not necessary to his title under )ec
;8.
2? 'ayment at or after maturity by a party secondarily liable does not
discharges the instrument but only cancels his own liability and that of
parties subse0uent to him.
$? $f the party so paying was formerly a +*#? he may recover from prior
parties as such a +*# even though at that time he had already notice of
defenses.
E>ect o' Renunciation
.. Cade before? at? or after maturity
$n favor of secondary party
made by the holder
eBect:discharge of secondary party only? not the instrument which will
remain in force
6. Cade at or after maturity
in favor of the principal debtor
eBect:discharge of '* and all parties prior thereto
'rovided: renunciation is absolute and unconditional.
When cance""ation inope#ati;e
1? Cade unintentionally5 or
2? By mista@e or through fraud5 or
$? Without authority
Mate#ia" A"te#ation( refers to any change in the instrument which aBects
the liability of the parties in any way as specied in )ec .6<? or changes
the contract of the parties in any respect.
Spoi"ation( material alteration made by a stranger
E>ect o' a"te#ation in the inst#u!ent
1? (egardless if the instrument is innocently or fraudulently altered? the
instrument is discharged/void but the innocent party can sue upon the
original debt for which it has been given5
BUT the instrument is not discharged/void as against (.) the party who has
made the alteration? and
(6) a party who authoriDed or assented to the alteration? and
(:) indorsers who indorsed subse0uent to the alteration.
6. )poilation has same eBect as alteration? it has no eBect upon the
instrument is the original meaning can be ascertained.
:. $f an altered instrument is negotiated to a +*#? he may enforce payment
thereof according to its original tenor regardless if innocently or
fraudulently altered.

PAYMENT FOR 5ONOR
'ayment made by a person? whether a party to the .i"" or not? after it has
been protested for non>payment? for the benet of any party liable thereon
or for the benet of the person for whose account it was drawn.
M)$%,A& A,%-N
Who !a !aBe pa!ent
1? By a party to the bill5
2? By a stranger5
$? By the drawee after he has refused to accept the bill
&? *rawe of a chec@ which has been dishonored and protested has a right to
intervene and pay it to protest his honor.
Re=uisites o' a 8a"i% Pa!ent 'o# 5ono#
1? The bill has been dishonored by non>payment5
2? $t has been protested for non>payment5
$? 'ayment Psupra protest7 is made by any person? even a party thereto5
&? The payment is attested by a notarial act of honor which must be
appended to the protest or form an e/tention of it5
A? The notarial act must be based on the declaration made by the payer for
honor or his agent of his intention to pay the bill for honor and for whose
honor he pays.
E>ect i' the a.o;e 'o#!a"ities is not 'o""o<e%
'ayment will operate as a mere voluntary payment5 ,%*
The payer has no right of full reimbursement against the party for whose
honor he pays.
P#e'e#ence o' pa#ties o>e#in: to pa 'o# hono#
To the person whose payment will discharge the greatest number of parties
to the bill.
The rule is diBerent in acceptance for honor.
E>ect <he#e .i"" is pai% 'o# hono#
1? *ischarge of subse0uent parties5 and
2? )ubrogation
Ri:ht o' pae# 'o# hono#
right to receive the bill itself and the protest
E>ect o' ho"%e#Cs #e'usa" to #ecei;e pa!ent 'o# hono#
he cannot recover from the parties who would have been discharged
had he accepted the same.
A44EPTAN4E FOR 5ONOR
,n underta@ing by a stranger to a bill after protest for the benet of any
party liable thereon? or for the honor of the person for whose account the
bill is drawn which acceptance inures to the benet of all the parties
subse0uent to the person for whose honor it is accepted? and conditioned
to pay the bill when it becomes due if the original drawee does not pay.
'urpose: to preserve the credit of the parties to the instrument or some
party to it for whose honor the acceptance is made.
Re=uisites/
1? The bill must have been protested for dishonor by non>acceptance or for
better security5
2? The acceptor for honor must be a person not a party already liable
thereon5
$? The bill must not be overdue at the time of the acceptance for honor5 and
&? The acceptance must be with the consent of the holder of the instrument.
A? Cust be in writing5
9? Cust indicate that it is an acceptance for honor5
7? Cust be signed by the acceptor for honor5 and
*? Cust contain an e/press or implied promise to pay money.
0? Cust be delivered (the accepted bill) to the holder.
M,ccepted for the honor of 'N
()igned)
G
A:#ee!ent o' Accepto# 'o# 5ono#
engages that he will? on due presentment? pay the bill according to the
terms of his acceptance? provided that the (.) bill was not paid by the
drawer? (6) it shall have been duly presented for payment and (:)
protested for non>payment? and (;) notice of dishonor was given to him.
Bill payable after sight: the date of maturity is calculated from the date of
the noting of non>acceptance and not from the date of the acceptance for
honor.
P#otest 'o# non(pa!ent . accepto# 'o# hono#
1? 'rotest for dishonor by non>acceptance or for better security
2? 'rotest for non>payment by the drawee in order to hold the acceptor for
honor liable
$? 'rotest for non>payment by the acceptor for honor in order to hold the
drawer and indorsers whose liabilities have not yet become /ed because
of the acceptance for honor.
Acceptance 'o# 5ono# an% O#%ina# Acceptance 2istin:uishe%
,"+ &,
,s to protest 'revious protest
re0uired
'rotest not
re0uired
,cceptor )tranger *rawee
#onsent of
holder
(e0uired %ot re0uired
Aiability )econdary 'rimary
%o. of
acceptors
Cay be several
,"+ for diBerent
parties in the bill
%o acceptors in
the alternative or
in succession
When
instruments is
discharged
%ot discharged
even upon
payment by the
,"+
*ischarged upon
payment by the
acceptor
D1@@S 1N SET
',(T$!): 'ayee (')
*rawer (()
*rawee (W)
B$A)): "irst 'art>>>neg.by ' to , on )ept 69Qfurther negotiated to *
)econd 'art>>>neg. by ' to B on )ept 6<>>>further negotiated to !
Third 'art>>>neg. by ' to # on )ept :9Qfurther negotiated to "
%ote:
.. !ach part may be negotiated by ' although he7s not supposed to do that
6. , is the true owner(the holder whose rst title accrued)
:. $f W pays B in due course? he can refuse to accept and pay the true owner?
,.
;. Where the bill is indorsed separately? the holder is liable to that part?
every indorser subse0uent to him is liable on that part that he himself has
indorsed.
<. W is re0uired to accept only one part of a bill in set.
=. $f he accepts two or more? and those were negotiated to a +*#? W is liable
to every holder as if the parts were separate bills.
2. $f '? before negotiating to ,?B and #? presented the : bills for acceptance
to W? then negotiates the parts to ,?B and #(all +*#s)? thenR
W is liable to ,?B?# for each amount of the part.
8. $f ' presented the : parts to W for acceptance but afterwhich does not
negotiate them? W is liable only the amount on one part to '.
3. W must re0uire the surrender of the bill upon his payment? otherwise? he
will be liable to that part not surrendered and to subse0uent holder
thereof.
.9. $f part of the bill is discharged by payment? the whole bill is discharged? as
far as ( is concerned. This is because a bill in a set constitute only one bill.