Section 71 oPresentment for payment not required in order to charge the

Far East Realty Investment v. CA drawer, and that notice of dishonor is not required to be
G.R. No. L-36549 | October 5, 1988 | PARAS, J. given to the drawer where he has no right to expect or
Digest by: TORIO require that the drawee or acceptor will honor the instrument.  
o Therefore, where presentment and notice of dishonor are not
Petitioner: Far East Realty Investment Inc.
necessary, the drawer is liable, whether such presentment
Respondents: CA, Dy Hian Tat, Siy Chee, and Gaw Suy An
and notice be totally omitted or merely delayed  
o However, in a situation where the presentment and/or notice
Parties to the instrument:
is required to made without unreasonable delay, the drawer
Drawer: Dy Hian Tat
is discharged pro tanto or only up to the degree of the loss
Drawee: China Bank
suffered by reason of delay  
Holder: Far East
● Respondents, on the other hand, argue that:  
o They had no transaction with Far East (check was actually
Doctrine:
delivered to Sin Chin Juat Grocery). Far East, therefore,
A bill of exchange, in this case a check, must be presented for payment
can't be considered holder of the check because
within a reasonable time after its last negotiation. What constitutes
respondents didn't receive consideration  
reasonable time must be determined on a case-to-case basis; but in this
o In order to charge persons secondarily liable (i.e., drawer,
case, it is obvious that both presentment and notice of dishonor were not
endorsers), the instrument must be presented for payment
made within reasonable time.
on the date and period therein mentioned if it is payable on a
fixed date, or within a reasonable time after issue, otherwise,
Facts: the drawer and endorsers are discharged from liability.  
● Far East alleges that on September 13, 1960, Dy Hian Tat, Siy Chee,
and Gaw Suy An (respondents) went to Far East’s office to ask for Issue/s:
an accommodation loan of Php 4500, which the respondents needed ● W/N the presentment for payment and notice of dishonor were within
for their business. Respondents jointly and severally promised to pay reasonable time? — NO  
the loan in one month time.  
● As evidence of their indebtedness, respondents issued a China Ratio:
Banking Corp. check for Php 4500 dated Sept. 13, 1960 drawn by ● Sec. 71 of NIL: Where the instrument is not payable on demand,
Dy Hian Tat and signed by respondents at the back. Respondents presentment must be made on the day it falls due. Where it is
assured that one month from Sept. 13, 1960, they will redeem the payable on demand, presentment must be made within reasonable
check and pay the Php 4500 or the check could be presented for time after issue, except that in the case of a bull of exchange,
payment to China Bank immediately after one month from Sept 13 presentment for payment will be sufficient if made within a
and the bank would honor the check.   reasonable time after the last negotiation thereof.  
● Far East agreed and gave respondents Php 4500.   o Reasonable time — time as is necessary under the
● On March 5, 1964, Far East presented the check to China Bank for circumstances for a reasonable, prudent, and diligent man to
payment but the check was dishonored because the drawer's do, conveniently, what the contract or duty requires should
account was closed. Far East demanded payment but respondents be done, having a regard for the rights, and possibility of
refused to pay so Far East filed a case to collect the debt.   loss, if any, to the other party  
● CFI ruled in favor of Far East. CA reversed.   ● Sec. 102 of NIL: Notice may be given as soon as the instrument is
● In this appeal by Far East, Far East argues that:   dishonored; and unless delay is excused must be given within the
o Presentment for payment may be dispensed with if it will be time fixed by the law.  
useless because of the conduct of the drawer in the matter ● In this case, the check was issued on Sept. 13, 1960 but was
or where the check is drawn on insufficient or no funds.   presented to China Bank only on March 5, 1964, and dishonored on
the same date. Formal notice of dishonor was made on April 27,
Avillon, Balagtas, Beleno, Bonoan, Capacite, Chang, Combate, Corpus, Cua, Da Silva, de la Torre, De Vera, Dela Cruz, Fabian, Fajardo, Ferrer, 31
Francisco, Gamad, Guevarra, Ham, Josef, Kee, Kit, Lauigan, Lumbre, Medel, Pamatmat, Rioflorido, San Diego, Siquian, Torio, Tsang, Villar
NEGO 2-D
 1968. Under these circumstances, Far East undoubtedly failed to
exercise prudence and diligence on what he ought to do as required
by law. Far East also failed to show any justification for the
unreasonable delay.  

Dispositive:
PREMISES CONSIDERED, the petition is DENIED and the decision of the
Court of Appeals is AFFIRMED.

Avillon, Balagtas, Beleno, Bonoan, Capacite, Chang, Combate, Corpus, Cua, Da Silva, de la Torre, De Vera, Dela Cruz, Fabian, Fajardo, Ferrer, 32
Francisco, Gamad, Guevarra, Ham, Josef, Kee, Kit, Lauigan, Lumbre, Medel, Pamatmat, Rioflorido, San Diego, Siquian, Torio, Tsang, Villar
NEGO 2-D