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Presentment for Payment/Acceptance PRUDENTIAL BANK vs. INTERMEDIATE Wong vs. CA G.R. No. 117857 February 2, 2001 || PRESENTMENT FOR
APPELLATE COURT, PHILIPPINE RAYON MILLS, INC. and ANACLETO R. CHI G.R. No. PAYMENT/ACCEPTANCE
74886 December 8, 1992 || (Presentment for acceptance)
FACTS: Petitioner Wong was an agent of Limtong Press. Inc. (LPI), a manufacturer
FACTS: Philippine Rayon Mills, Inc. entered into a contract with Nissho Co., Ltd. of of calendars. LPI would print sample calendars, then give them to agents to
Japan for the importation of textile machineries under a five-year deferred present to customers. The agents would get the purchase orders of customers and
payment plan. To effect payment for said machineries, Philippine Rayon Mills forward them to LPI. After printing the calendars, LPI would ship the calendars
opened a commercial letter of credit with the Prudential Bank directly to the customers.
and Trust Company in favor of Nissho. Against this letter of credit, drafts were
drawn and issued by Nissho, which were all paid by the Prudential Bank through Thereafter, the agents would come around to collect the payments. Petitioner,
its correspondent in Japan. Two of these drafts were accepted by Philippine Rayon however, had a history of unremitted collections, which he duly acknowledged in
Mills while the others were not. Petitioner instituted an action for the recovery of a confirmation receipt he co-signed with his wife. Hence, petitioners customers
the sum of money it paid to Nissho as Philippine Rayon Mills was not able to pay were required to issue postdated checks before LPI would accept their purchase
its obligations arising from the letter of credit. The lower court ordered PRMI to orders.
pay for the 2 drafts which were accepted the 10 were not yet accepted and for
Chi it was dismissed. The Respondent court ruled that with regard to the ten drafts In early December 1985, Wong issued six (6) postdated checks totaling
which were not presented and accepted, no valid demand for payment can be P18,025.00, all dated December 30, 1985 and drawn payable to the order of LPI.
made. Petitioner however claims that the drafts were sight drafts which did not These checks were initially intended to guarantee the calendar orders of
require presentment for acceptance to Philippine Rayon. customers who failed to issue post-dated checks. However, following company
policy, LPI refused to accept the checks as guarantees. Instead, the parties agreed
ISSUE: Whether presentment for acceptance of the drafts was indispensable to to apply the checks to the payment of petitioners unremitted collections for 1984
make Philippine Rayon liable thereon amounting to P18,077.07. LPI waived the P52.07 difference. Before the maturity
of the checks, petitioner prevailed upon LPI not to deposit the checks and
RULING: NO. Petition GRANTED. Philippine Rayon Mills, Inc. liable on the 12 drafts. promised to replace them within 30 days. However, petitioner reneged on his
Anacleto R. Chi (as guarantor) secondarily liable on the trust receipt. In the case promise.
at bar, the drawee was necessarily the herein petitioner. It was to the latter that
the drafts were presented for payment. There was in fact no need for acceptance Hence, on June 5, 1986, LPI deposited the checks with Rizal Commercial Banking
as the issued drafts are sight drafts. Presentment for acceptance is necessary Corporation (RCBC). The checks were returned for the reason account closed.
only in the cases expressly provided for in Section 143 of the Negotiable On June 20, 1986, complainant through counsel notified the petitioner of the
Instruments Law (NIL). The said section provides that presentment for acceptance dishonor. Petitioner failed to make arrangements for payment within five (5)
must be made: banking days. On November 6, 1987, petitioner was charged with three (3) counts
of violation of B.P. Blg. 224. The trial court found him guilty and the Court of
(a) Where the bill is payable after sight, or in any other case, where presentment Appeals affirmed the decision. Hence, the present petition.
for acceptance is necessary in order to fix the maturity of the instrument; or
(b) Where the bill expressly stipulates that it shall be presented for acceptance; or ISSUE: Whether or not LPI deposited the checks within reasonable time.
(c) Where the bill is drawn payable elsewhere than at the residence or place of
business of the drawee. HELD: Yes. Petitioner avers that since the complainant deposited the checks on
June 5, 1986, or 157 days after the December 30, 1985 maturity date, the
In no other case is presentment for acceptance necessary in order to render any presumption of knowledge of lack of funds under Section 2 of B.P. Blg. 22 should
party to the bill liable. Obviously then, sight drafts do not require presentment for not apply to him.
acceptance.
Under Section 186 of the Negotiable Instruments Law, a check must be presented Subsequently, in a letter addressed to Ms. Desi Tomas, vicepresident of the bank,
for payment within a reasonable time after its issue or the drawer will be dated 4 September 1995, Dr. Gueco instructed the bank to disregard the "hold
discharged from liability thereon to the extent of the loss caused by the delay. By order"letter and demanded the immediate release of his car, to which the former
current banking practice, a check becomes stale after more than six (6) months, replied that the condition of signing the joint motion to dismiss must be satisfied
or 180 days. Private respondent herein deposited the checks 157 days after the and that they had kept the check which could be claimed by Dr.Gueco anytime.
date of the check. Hence said checks cannot be considered stale. While there is controversy as to whether the document evidencing the order to
hold payment of the check was formally offered as evidence by the bank, it
As found by the trial court, private respondent did not deposit the checks because appears from the pleadings that said check has not been encashed. Issue:
of the reassurance of petitioner that he would issue new checks. Upon his failure Whether the bank was negligent in opting not to deposit or use the managers
to do so, LPI was constrained to deposit the said checks. After the checks were check
dishonored, petitioner was duly notified of such fact but failed to make
arrangements for full payment within five (5) banking days thereof. There is, on Held:
record, sufficient evidence that petitioner had knowledge of the insufficiency of NO. A stale check is one which has not been presented for payment within a
his funds in or credit with the drawee bank at the time of issuance of the checks. reasonable time after its issue. It is valueless and, therefore, should not be paid.
Under the negotiable instruments law, an instrument not payable on demand
The International Corporate Bank v. Sps. Gueco GR No. 141968 || Presentment for must be presented for payment on the day it falls due. When the instrument is
Payment payableon demand, presentment must be made within a reasonable time after its
issue.
Facts: Spouses Francis S. Gueco and Ma. Luz E. Gueco obtained a loan from
petitioner InternationalCorporate Bank (now Union Bank of the Philippines) to In the case of a bill of exchange, presentment is sufficient if made within a
purchase a car a Nissan Sentra 1600 4DR, 1989Model. reasonable time after the last negotiation thereof. A check must be presented for
payment within a reasonable time after its issue, and in determining what is a
In consideration thereof, the Spouses executed promissory notes which were "reasonable time," regard is to be had to the nature of the instrument, the usage
payable in monthlyinstallments and chattel mortgage over the car to serve as of trade or business with respect to such instruments, and the facts of the
security for the notes. The Spouses defaulted inpayment of particular case. The test is whether the payee employed such diligence as a
installments.Consequently, the Bank filed on 7 August 1995 a civil action (Civil prudent man exercises in his own affairs. This is because the nature and theory
Case 658-95)for "Sum of Money with Prayer for a Writ of Replevin" before the behind the use of a check points to its immediate use and payability. In a case, a
Metropolitan Trial Court of Pasay City. check payable on demand which was long overdue by about two and a half (2-1/2)
years was considered a stale check.
Desi Tomas, the Bank's Assistant VicePresident demanded payment of the amount
of P184,000.00 which represents the unpaid balance for the carloan. After some Failure of a payee to encash acheck for more than 10 years undoubtedly resulted
negotiations and computation, the amount was lowered to P154,000.00, in the check becoming stale. Thus, even a delay of 1 week or two (2) days, under
However, as a resultof the non-payment of the reduced amount on that date, the the specific circumstances of the certain cases constituted unreasonable time as
car was detained inside the bank's compound. amatter of law. Herein, the check involved is not an ordinary bill of exchange but
a manager's check.
In the meeting of 29 August 1995, Dr. Gueco delivered a manager's check
representing thereduced amount of P150,000.00. Said check was given to Mr. A manager's check is one drawn by the bank's manager upon the bank itself. It is
Rivera, a representative of the bank However,since Dr. Gueco refused to sign the similar to a cashier's checkboth as to effect and use. A cashier's check is a check
joint motion to dismiss, he was made to execute a statement to the effectthat he of the bank's cashier on his own or another check. Ineffect, it is a bill of exchange
was withholding the payment of the check. drawn by the cashier of a bank upon the bank itself, and accepted in advance
bythe act of its issuance. It is really the bank's own check and may be treated as a
promissory note with the bankas a maker. The check becomes the primary
obligation of the bank which issues it and constitutes its written promise to pay
upon demand. The mere issuance of it is considered an acceptance thereof. If HELD: Sec. 52 of the Negotiable Instruments Law states: A holder in due course is
treated aspromissory note, the drawer would be the maker and in which case the a holder who has taken the instrument under the following conditions: (a) That it
holder need not prove presentment forpayment or present the bill to the drawee is complete and regular upon its face; (b) That he became the holder of it before
for acceptance. it was overdue, and without notice that it was previously dishonored, if such was
the fact; (c) That he took it in good faith and for value; (d) That at the time it was
Even assuming that presentment is needed, failure topresent for payment within negotiated to him he had no notice of any infirmity in the instrument or defect in
a reasonable time will result to the discharge of the drawer only to the extent the title of the person negotiating it.
ofthe loss caused by the delay. Failure to present on time, thus, does not totally
wipe out all liability. In fact, thelegal situation amounts to an acknowledgment of With that, evidence clearly shows that: (a) on their faces the postdated checks
liability in the sum stated in the check. In this case, theGueco spouses have not were complete and regular: (b) petitioner bought these checks from the payee,
alleged, much less shown that they or the bank which issued the manager's check Corazon Victoriano, before their due dates;(c) petitioner took these checks in
hassuffered damage or loss caused by the delay or non-presentment. Definitely, good faith and for value, albeit at a discounted price; and, (d) petitioner was never
the original obligation to paycertainly has not been erased. It has been held that, informed nor made aware that these checks were merely issued to payee as
if the check had become stale, it becomes imperative thatthe circumstances that security and not for value.
caused its non-presentment be determined. Herein, the bank held on the check
andrefused to encash the same because of the controversy surrounding the Consequently, petitioner is indeed a holder in due course. As such, it holds the
signing of the joint motion to dismiss. The Court saw no bad faith or negligence in instruments free from any defect of title of prior parties, and from defenses
this position taken by the Bank. available to prior parties among themselves; it may, therefore, enforce full
payment of the checks. Since she was responsible for the dishonor of her checks,
there was no need to serve her Notice of Dishonor, which is simply bringing to the
Checks knowledge of the drawer or indorser of the instrument, either verbally or by
State Investment House Inc., v. Court of Appeals GR No. 101163 || Checks writing, the fact that a specified instrument, upon proper proceedings taken, has
not been accepted or has not been paid, and that the party notified is expected to
FACTS: pay it. Moulic, as drawer, is liable for the value of the checks she issued to the
Private respondent, Nora B. Moulic issued to Corazon Victoriano, as security for holder in due course, State Investment, without prejudice to any action for
pieces of jewelry to be sold on commission, two (2) postdated Equitable Banking recompense she may pursue against Victoriano as Third-Party Defendants who
Corporation checks in the amount P50,000.00 each, one dated 30 August 1979 had already been declared as in default.
and the other, 30 September 1979. Thereafter, the payee negotiated the checks
to petitioner State Investment House. Inc. Moulic failed to sell the pieces of Material Alteration Philippine National Bank v. CA 256 SCRA 491 || Sections 124
jewelry so she returned them to the payee before the maturity dates of the &125
checks. However, the checks could no longer be retrieved as they had already
been negotiated. Consequently, Moulic withdrew her funds from the drawee FACTS:
bank. Upon presentment for payment, the checks were dishonored for A check with a specific serial number (7-3666-223-3)was issued Department of
insufficiency of funds so State Investment notified Moulic of the dishonour of the Education Culture and Sports (DECS) in the amount of P97,650.00 payable to F.
checks, which Moulic denied receiving notice thereof. State Investment then sued Abante Marketing. This check was drawn against petitioner PNB.
to recover the value of the checks. However, Moulic contends that she incurred
no obligation on the checks because the jewelry was never sold and the checks F. AbanteMarketing, deposited the questioned check in its savings account with
were negotiated without her knowledge and consent. Capitol City Development Bank (Capitol). In turn, Capitol deposited the same in its
account with the Philippine Bank of Communications (PBCom) which, in turn, sent
ISSUE: Whether or not petitioner is a holder in due course therefore making the check to petitioner for clearing.
Moulic liable for the value of the checks she issued.
Petitioner cleared the check as good and, thereafter, PBCom credited Capitols cannot refuse to accept the check in question on the ground that the serial
account for the amount stated in the check. Petitioner returned the check to number was altered, the same being an immaterial or innocent one.
PBCom and debited PBComs account for the amount covered by the check, the
reason being that there was a material alteration of the check number. PBCom,
as collecting agent of Capitol, then proceeded to debit the latters account for the ENRIQUE P MONTINOLA VS THE PHILIPPINE NATIONAL BANK G.R. NO L-2861 ||
same amount, and subsequently, sent the check back to petitioner. Petitioner, SECTION 124 & 125
however, returned the check to PBCom.
FACTS:
On the other hand, Capitol could not, debit F. Abante Marketings account since On April 30, 1942, M. V.Ramos, as a disbursing officer of an army division of the
the latter had already withdrawn the amount of the check. Capitol sought USAFE, went to the neighboring Province Lanao to procure a cash advance in the
clarification from PBCom and demanded the re-crediting of the amount. PBCom amount of P800,000 for the use of the USAFFE in Cagayan de Misamis.
followed suit by requesting an explanation and recrediting from petitioner. Since
the demands of Capitol were not heeded, it filed a civil suit with the Regional Trial Pedro Encarnacion, Provincial Treasurer of Lanao did not have that amount in
Court of Manila against PBCom which, in turn, filed a thirdparty complaint against cash. So, he gave Ramos P300,000 in emergency notes and a check for P500,000.
petitioner for reimbursement/indemnity with respect to the claims of Capitol On May 2, 1942 Ramos went to the office of Provincial Treasurer Laya at Misamis
Oriental to encash the check for P500,000 which he had received from the
Petitioner claims that an change in the serial number of the check is a material Provincial Treasurer of Lanao. Laya did not have enough cash to cover the check
alteration under Section 125(f) of the NIL. so he gave Ramos P400,000.00 in emergency notes and a check No. 1382 for
P100,000.00 drawn on the Philippine National Bank.
ISSUE: WHETHER OR NOT AN ALTERATION OF THE SERIAL NUMBER OF A CHECK
IS A MATERIAL ALTERATION UNDER THE NEGOTIABLE INSTRUMENTS LAW According to Laya he had previously deposited P500,000.00 emergency notes in
the Philippine National Bank branch in Cebu and he expected to have the check
issued by him cashed in Cebu against said deposit. Ramos was unable to encash
HELD: No. An alteration is said to be material if it alters the effect of the the said check for he was captured by the Japanese. But after his release, he
instrument. It means an unauthorized change in an instrument that purports to sold P30,000.00 of the check to Enrique P. Montinola for P850,000.00 Japanese
modify in any respect the obligation of a party or an unauthorized addition of Military notes, of which only P45000 was paid by the latter.
words or numbers or other change to an incomplete instrument relating to the
obligation of a party. In other words, a material alteration is one which changes The writing made by Ramos at the back of the check was to the effect that
the items which are required to be stated under Section 1 of the Negotiable he was assigning only P30,000.00 of the value of the document with an instruction
Instrument Law. to the bank to pay P30,000.00 to Montinola and to deposit the balance to
Ramos's credit.
The case at bench is unique in the sense that what was altered is the serial number
of the check in question, it can is not an essential requisite for negotiability under This writing was, however, mysteriously obliterated and in its place, a supposed
Section 1 of the Negotiable Instrument Law. The aforementioned alteration did endorsement appearing on the back of the check was made for the whole amount
not change the relations between the parties. The name of the drawer and the of the check. At the time of the transfer of this check to Montinola, the check
drawee were not altered. The intended payee was the same. The sum of money was long overdue by about 2-1/2 years.
due to the payee remained the same. The checks serial number is not the sole
indication of its origin. As succinctly found by the Court of Appeals, the name of Montinola instituted an action against the PNB and the Provincial Treasurer of
the government agency which issued the subject check was prominently printed Misamis Oriental to collect the sum of P100,000, the amount of the aforesaid
therein. The checks issuer was therefore sufficiently identified, rendering the check. There now appears on the face of said check the words in parenthesis
referral to the serial number redundant and inconsequential. Petitioner, thus "Agent, Phil. National Bank" under the signature of Laya purportedly showing
that Laya issued the check as agent of the Philippine National Bank.
 Sanshell then made use of and/or negotiated the check. Accompanying the
ISSUE: Whether or not the subject check is a negotiable instrument. exchange of checks was a Deed of Assignment executed by Nyco Sales (assignor)
in favor of BA Finance (assignee) with the conformity of Sanshell. Under the said
HELD: Deed, the subject of the discounting was P60k BPI check.
No. It was not negotiated according to the Negotiable Instruments Law (NIL) hence
it is not a negotiable instrument. There was only a partial indorsement and not a The check bounced. BA Finance notified Sanshell. Sanshell substituted the BPI
negotiation contemplated under the NIL. Only P30k of the P100k amount of the check with a Security Bank and Trust Company check for P60k. This check again
check was indorsed. This merely makeMontinola a mere assignee and this is the bounced. BA Finance made repeated demands to Nyco Sales and Sanshell but
clear intent of Ramos. neither of the two settled the obligation. Hence, BA Finance sued Nyco Sales. Nyco
Sales averred that it received no notice of dishonor when the second check was
Ramos was merely assigning P30k to Montinola. Montinola may therefore not be dishonored.
regarded as an indorsee and PNB has all the right to dishonor the check. As mere
assignee, he is subject to all defenses available to the drawer Provincial Treasurer ISSUE: Whether or not Nyco Sales is liable to pay BA Finance.
of Misamis Oriental and against Ramos. Anent the issue of alteration, the apparent
purpose of which is to make the drawee (PNB) the drawer against which HELD:
Montinola can recover from directly. Such material alteration which was done by Yes. The relationship between Nyco Sales and BA Finance is one of assignor-
Montinola without the consent of the parties liable thereon discharges the assignee. The assignor-vendor warrants both the credit itself (its existence and
instrument, pursuant to Sec. 124 of the NIL. legality) and the person of the debtor (his solvency), if so stipulated, as in the case
at bar.
Montinola cannot be said to be a holder. He is an assignee. And even if he is a
holder, he is not in good faith because he did not pay the full amount of the Consequently, if there be any breach of the above warranties, the assignor-vendor
consideration for which the P30k was issued to him he only paid 45k Japanese should be held answerable therefor. There is no question then that the assignor-
notes out of the 90k Japanese notes consideration. At any rate, even assuming vendor is indeed liable for the invalidity of whatever he assigned to the assignee-
that there is proper negotiation, Montinola can no longer encash said check vendee. Considering now the facts of the case at bar, it is beyond dispute that
because when he sought to have it encashed in January 1945, it is already stale Nyco executed a deed of assignment in favor of BA Finance with Sanshell
there being two and half years pass since its time of issuance. Corporation as the debtor-obligor. BA Finance is actually enforcing said deed and
the check covered thereby is merely an incidental or collateral matter. This
particular check merely evidenced the credit which was actually assigned to BA
NYCO SALES CORPORATION VS BA FINANCE CORPORATION Finance. Thus, the designation is immaterial as it could be any other check. It is
200 SCRA 637 Mercantile Law Negotiable Instruments Law Notice of Dishonor only what is represented by the said checks that
Assignment of Credit Nyco is being asked to pay.

Nyco Sales Corporation has discounting privileges with BA Finance Corporation. In Nyco Sales pretension that it had not been notified of the fact of dishonor is belied
1978, brothers Renato Fernandez and Santiago Renato (officers of Sanshell not only by the formal demand letter issued by BA Finance but also by the fact
Corporation) approached Nyco Sales Corporation for a credit accommodation in that Nyco Sales and Sanshell had frequent contacts before, during and after the
order for the brothers make use of Nycos discounting privileges. dishonor. More importantly, as long as the credit remains outstanding, Nyco Sales
shall continue to be liable to BA Finance as its assignor. The dishonor of an
Nyco Sales agreed and so, on November 15, 1978, Sanshell issued a post-dated assigned check simply stresses its liability and the failure to give a notice of
(November 17, 1978) BPI check to Nyco Sales in the amount of P60,000.00. dishonor will not discharge it from such liability. This is because the cause of action
Following the discounting process agreed upon, Nyco Sales, thru its president stems from the breach of the warranties embodied in the Deed of Assignment,
Rufino Yao, endorsed the check in favor of BA Finance. Thereafter, BA Finance and not from the dishonoring of the check alone.
issued a check payable to Nyco Sales which endorsed it in favor of Sanshell.