Contract – Negotiable Instruments – Promissory Note – Presentment & Dishonor – Prerequisites to Suit

Brungard v. Canestorp (Lawyers Weekly No. 012-171-17, 8 pp.) (Robert Hunter Jr., J.) Appealed from Craven County Superior Court (John Nobles Jr., J.) N.C. App. Unpub.

Holding: The parties’ promissory note said the loan amount was due on Dec. 7, 2012, but the note does not mention presentment or dishonor. Therefore, plaintiff was required to demand payment from defendant before plaintiff filed suit to enforce the note.

We affirm the trial court’s grant of defendant’s motion for a directed verdict.

The note recites that defendant “will pay to Jeffrey Brungard principal and interest totaling $33,000 on or before 7 December 2012.” The note is thus payable to “an identified person” and is a “negotiable instrument” under G.S. § 25-3-104(a)(1).

The note was “due in full” on Dec. 7, 2012. Under the Uniform Commercial Code, it is the responsibility of the holder of the note to present the note to the party “obliged to pay the instrument.” § 25-3-501(a). Therefore, in order for plaintiff to collect, he had to present the note and demand payment. After presentment, if defendant failed to pay plaintiff, then defendant has given plaintiff notice of “dishonor.” § 25-3-502(a)(3).

Looking at the terms of the note, there is no indication that presentment was “not necessary to enforce the obligation of the indorsers or the drawer.” § 25-3-504(a). Likewise, the terms of the note do not reveal the parties intended to excuse or waive dishonor. The record does not show the existence of any other circumstances which would allow the excusal of presentment and dishonor. § 25-3-504.

Plaintiff failed to make a demand, or presentment, on the note. Consequently, defendant could not, and did not, give plaintiff notice of dishonor. The parties did not waive the requirements of presentment and dishonor under the UCC; therefore, the trial court properly found that plaintiff failed to take the required steps to execute payment on the note.

Affirmed.