Exhibition of Negotiable Instruments For Payment

Sec.  74.  Instrument must  be  exhibited. -  The  instrument must be exhibited  to  the  person  from  whom  payment  is  demanded,  and when it is paid, must be delivered up to the party paying it.

NECESSITY OF EXHIBITION OF INSTRUMENT

•      Presentment  includes  not  only  demand  for  payment  but  also  the exhibition of the instrument
•      Purpose  is  to  enable  the  debtor  to  determine  the  genuineness  of  the instrument  and  the  right  of  the  holder  to  receive  payment  and  to
enable him to retain possession upon payment

A DEMAND BY TELEPHONE IS INSUFFICIENT

WHEN EXHIBITION EXCUSED

1.    When  the  debtor  doesn’t  demand  to  see  the  instrument  but refuses payment on some other grounds
2.    When the instrument is lost or destroyed

CASE DIGESTS

ANSALDO V. CA, 177 SCRA 8

FACTS:

TFC  issued  promissory  notes  in  favor  of  PCIB.    At  about  the  same  time, TFC extended loans to Ansaldo and Reyes.  These loans were evidenced by promissory notes, each waiving demand, presentment, protest, and notice of  protest  and  non-payment.    TFC  then  paid  part  of  its  obligation  with
PCIB.  To pay for its outstanding balance, it endorsed the notes issued by Ansaldo  and  Reyes.    Claiming  that  the  notes  have  matured  without payment by Ansaldo and Reyes, the bank instituted actions against them.   

HELD:

The  contention  of  Ansaldo  that  the  instrument  should  have  been  first presented to him is bereft of merit.

First, it couldn’t be first raised on appeal.   

Second, it is a petty issue for if according to him, such an exhibition was needed  to  give  him  opportunity  to  determine  the  genuineness  of  the instrument,  this  was  rendered  unnecessary  not  only  by  his  omission  to contest it, but also by his admission of the authenticity of the note implicit from his averment that he made substantial payments thereon and second, he made a waiver of demand, presentment, etc.