TITLE 11 COMMERCIAL CODE

Section 3. Negotiable Instruments, 11-3-101 through 11-3-605.

ARTICLE 3 NEGOTIABLE INSTRUMENTS

11-3-501. Presentment.

"Presentment" means a demand made by or on behalf of a person entitled to enforce an instrument to (i) pay the instrument made to the drawee or a party obliged to pay the instrument or, in the case of a note or accepted draft payable at a bank, to the bank; or (ii) accept a draft made to the drawee.
The following rules are subject to Article 4 of this title, agreement of the parties, and clearing-house rules and the like:
1. Presentment may be made at the place of payment of the instrument and must be made at the place of payment if the instrument is payable at a bank in the United States. Presentment may be made by any commercially reasonable means, including an oral, written, or electronic communication. Presentment is effective when the demand for payment or acceptance is received by the person to whom presentment is made and is effective if made to any one of two or more makers, acceptors, drawees, or other payors.
2. Upon demand of the person to whom presentment is made, the person making presentment must:
3. Without dishonoring the instrument, the party to whom presentment is made may:
4. The party to whom presentment is made may treat presentment as occurring on the next business day after the day of presentment if the party to whom presentment is made has established a cut-off hour not earlier than 2:00 P.M. for the receipt and processing of instruments presented for payment or acceptance and presentment is made after the cut-off hour.

Exhibit the instrument;

Give reasonable identification and, if presentment is made on behalf of another person, reasonable evidence of authority to do so; and

Sign a receipt on the instrument for any payment made or surrender the instrument if full payment is made.

Return the instrument for lack of a necessary indorsement; or

Refuse payment or acceptance for failure of the presentment to comply with the terms of the instrument, an agreement of the parties, or other applicable law or rule.

(Code 1981, §11-3-501, enacted by Ga. L. 1996, p. 1306, § 3.)

Law reviews.

- For note, "The Law of Evidence in the Uniform Commercial Code," see 1 Ga. L. Rev. 44 (1966). For comment on Studstill v. American Oil Co., 126 Ga. App. 722, 191 S.E.2d 538 (1972), see 24 Mercer L. Rev. 939 (1973).

JUDICIAL DECISIONS

Editor's notes.

- In light of the similarity of the issues dealt with by the provisions, decisions under former Code 1882, § 2781, former Code 1933, §§ 14-701 and 14-801, and former Code Sections 11-3-503, 11-3-504 are included in the annotations for this Code section.

Necessity of presentment for payment and notice of dishonor.

- According to rules of common law, as interpreted by the Supreme Court, the endorser of a promissory note is entitled to have the same duly presented for payment, and of a failure or refusal to pay the endorser is entitled to notice; and a failure of the holder to present for payment, or to give notice of nonpayment, discharges the endorser from liability. McCarroll v. First Inv. Co., 109 Ga. App. 748, 137 S.E.2d 319 (1964) (decided under former Code 1933, §§ 14-701 and 14-801).

Personal notification.

- It is necessary that each endorser be notified personally. Aldine Mfg. Co. v. Warner, 96 Ga. 370, 23 S.E. 404 (1895) (decided under former Code 1882, § 2781).

When presentment and notice of dishonor not required.

- The law does not require that notice of presentment and dishonor of a negotiable instrument be given to an endorser in order to charge the endorser with liability, where the endorser already has knowledge of such matters. The law does not require a useless thing. McCarroll v. First Inv. Co., 109 Ga. App. 748, 137 S.E.2d 319 (1964) (decided under former Code 1933, §§ 14-701 and 14-801).

Contents of petition against endorser.

- To bind the endorser as such on notes endorsed after maturity, there had to be a presentment for payment and notice of dishonor upon nonpayment, and before endorsee could proceed against endorser on the instrument, petition must have set forth compliance with these prerequisites to liability. DeLoach v. Adams Loan & Inv. Co., 62 Ga. App. 61, 7 S.E.2d 580 (1940) (decided under former Code 1933, §§ 14-701 and 14-801).

Retention of check for unreasonable time constituting an acceptance.

- Retention of check for unreasonable time without cashing and without indicating refusal to accept it as an accord and satisfaction constitutes acceptance. Studstill v. AMOCO, 126 Ga. App. 722, 191 S.E.2d 538 (1972), aff'd, 230 Ga. 305, 196 S.E.2d 847 (1973), later appeal, 132 Ga. App. 56, 207 S.E.2d 553 (1974) (decided under former Code Section11-3-503).

Retention of check for unreasonable period may work accord and satisfaction.

- If one intends to accept a check as payment of demand, it should be promptly presented for payment, usually within a 30-day period. Where, in absence of circumstances suggesting a contrary state of facts, the check, although not cashed, is kept for a period greatly in excess of this time, such retention may of itself cause the debtor to rely on theory that his offer (accord) has been accepted (satisfaction), in which case the creditor no longer has a right of action for any excess payment due. Studstill v. AMOCO, 126 Ga. App. 722, 191 S.E.2d 538 (1972), aff'd, 230 Ga. 305, 196 S.E.2d 847 (1973), later appeal, 132 Ga. App. 56, 207 S.E.2d 553 (1974) (decided under former Code Section11-3-503).

Retention of check with knowledge of refused acceptance.

- Mere retention of stale check, with knowledge on part of debtor that creditor refused to accept it in full satisfaction of unliquidated liability, will not operate as an accord and satisfaction. Studstill v. AMOCO, 126 Ga. App. 722, 191 S.E.2d 538 (1972), aff'd, 230 Ga. 305, 196 S.E.2d 847 (1973), later appeal, 132 Ga. App. 56, 207 S.E.2d 553 (1974) (decided under former Code Section11-3-503).

Pre-Code rule affirmed.

- Only holder or holder's agent may properly present check for payment. Thus, the Uniform Commercial Code reaffirms general pre-Code rule that drawee may not charge its drawer customer's accounts for payment of order instrument bearing a forged endorsement. Perini Corp. v. First Nat'l Bank, 553 F.2d 398 (5th Cir. 1977) (decided under former Code Section 11-3-504).

OPINIONS OF THE ATTORNEY GENERAL

Bank's freedom in deciding how to treat collection item.

- Neither T. 7 nor T. 11 restricts in any way a bank's freedom to decide how it will treat any particular collection item, whether it be a check or a credit union share draft. 1977 Op. Att'y Gen. No. 77-2 (rendered under former Code Section 11-3-504).

Banks' processing of credit union share drafts.

- Law of this state does not require banks to process credit union share drafts as cash items, rather than as drafts for collection. 1977 Op. Att'y Gen. No. 77-2 (rendered under former Code Section 11-3-504).

RESEARCH REFERENCES

Am. Jur. 2d.

- 11 Am. Jur. 2d, Bills and Notes, §§ 105, 125, 313 et seq., 375, et seq.

C.J.S.

- 10 C.J.S., Bills and Notes, § 202 et seq.

U.L.A.

- Uniform Commercial Code (U.L.A.) § 3-501.

ALR.

- To whom should notice of protest or of dishonor of commercial paper be given in event of death of the party entitled thereto, 1 A.L.R. 474.

Conduct of holder of check at time of presentation for payment as affecting drawer's liability, 4 A.L.R. 1233.

Right of owner of check which the drawee bank held for him at time it closed its doors, to a preference, 17 A.L.R. 196.

Insolvency or bankruptcy of party primarily liable on commercial paper as excusing demand and notice of dishonor, 25 A.L.R. 962; 87 A.L.R. 1394.

Necessity of protest and notice as between coindorsers of negotiable paper, 32 A.L.R. 190.

Bills and notes: necessity of possession and exhibition of paper at time of demand in order to make a valid presentment, 50 A.L.R. 1200.

Validity and effect of promise made after filing of petition in bankruptcy, but before discharge, to pay existing debt, 83 A.L.R. 1295.

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