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Far East Realty Vs CA (166 SCRA 256, 1988)

Far East Realty Investment Inc. loaned private respondents Php4,500 in 1960 and received a post-dated check as collateral. The check bounced in 1964 when presented for payment. The Court ruled presentment and notice of dishonor were not made within a reasonable time as the check was issued in 1960 but not presented until 1964. Reasonable time depends on the specific facts and circumstances of each case.

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152 views2 pages

Far East Realty Vs CA (166 SCRA 256, 1988)

Far East Realty Investment Inc. loaned private respondents Php4,500 in 1960 and received a post-dated check as collateral. The check bounced in 1964 when presented for payment. The Court ruled presentment and notice of dishonor were not made within a reasonable time as the check was issued in 1960 but not presented until 1964. Reasonable time depends on the specific facts and circumstances of each case.

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Far East Realty Investment Inc. vs.

The Honorable Court of Appeals, Dy Hian Tat, Siy


Chee and Gaw Suy An
G.R. No. L-36549, October 5, 1988
166 SCRA 256
FACTS: On September 13, 1960, the private respondents, because of business
needs, applied for an accommodation loan in the amount of Php4,500.00  with
petitioner Far East Realty Investment Inc. They promised to pay jointly and
severally, in one month time and delivered to petitioner a check dated September
13, 1960, for P4,500.00, drawn by Dy Hian Tat, and signed by them at the back. They
assured the petitioner that they would redeem the said check by paying in cash the
said amount after a month from September 13, 1960, or that the said check could
be presented for payment on or after a month from the date indicated on the
check.
The accommodation loan was extended to the respondents, however, on March 5,
1964, when the check was presented for payment to the the China Banking
Corporation, said check bounced because the current account of the drawer had
already been closed. Demand for payment failed so the petitioner filed an action
for the collection and payment of P4,500.00 representing the face value of the
unpaid and dishonored check.

ISSUE: Whether or not presentment for payment and notice of dishonor of the
questioned check were made within reasonable time.
RULING: The Court ruled that, in this case, presentment and notice of dishonor
were not made within a reasonable time. The check was issued on September 13,
1960, but was presented to the drawee bank only on March 5, 1964, and
dishonored on the same date. After dishonor by the drawee bank, a formal notice
of dishonor was made by the petitioner through a letter dated April 27, 1968. The
petitioner failed to exercise prudence and diligence on what he ought to do as
required by law. Likewise, it failed to show any justification for the unreasonable
delay.
Reasonable time” has been defined as so much time as is necessary under the
circumstances for a reasonable prudent and diligent man to do, conveniently, what
the contract or duty requires should be done, having a regard for the rights, and
possibility of loss, if any, to the other party (Citizens’ Bank Bldg. v. L & E.
Wertheirmer 189 S.W. 361, 362, 126 Ark, 38, Ann. Cas. 1917 E, 520).

NOTES:
Where an instrument is payable on demand, presentment must be made within a reasonable time
after issue; Reasonable time depends upon the peculiar facts and circumstances in each case. –
Where the instrument is not payable on demand, presentment must be made on
the day it falls due. Where it is payable on demand, presentment must be made
within a reasonable time after issue, except that in the case of a bill of exchange,
presentment for payment will be sufficient if made within a reasonable time after
the last negotiation thereof. (Section 71, Negotiable Instruments Law).
Notice may be given as soon as the instrument is dishonored; and unless delay is
excused must be given within the time fixed by the law (Section 102, Negotiable
Instruments Law).

No hard and fast demarcation line can be drawn between what may be considered
as a reasonable or an unreasonable time, because “reasonable time” depends upon
the peculiar facts and circumstances in each case (Tolentino, Commentaries and
Jurisprudence on Commercial Laws of the Philippines, Vol. I, Eighth Edition, p. 327).

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