G.R. No. L-26767 February 22, 1968
Lessons Applicable: General Indorser (Negotiable Instrurments)
Laws Applicable: Section 63 of the Negotiable Instruments Law
FACTS:
- August 15, 1960: Lorenzo Ting issued Philippine Bank of Communications check K-81618, w/ sum of P4,000, payable to "cash or bearer"
- With Felipe Ang's signature (indorsement in blank) at the back thereof, the instrument was received by the Ang Tiong who presented it to the drawee bank for payment but it was dishonored
- Ting made a written demand to both Ting and Ang to no avail
- March 6, 1962: Municipal Court of Manila favored Tiong against Ting and Ang
- CA: ordered Ang to pay with interest
- Ang contends that he is an accomodating indorser
ISSUE: W/N Ang is an accomodating indorser and not a general indorser a
HELD: NO. Affirmed
- Section 63 of the Negotiable Instruments Law: a person placing his signature upon an instrument otherwise than as maker, drawer or acceptor = a general indorser, — unless he clearly indicates plaintiff appropriate words his intention to be bound in some other capacity
- warrants:
- (a) that the instrument is genuine and in all respects what it purports to be;
- (b) that he has a good title to it;
- (c) that all prior parties have capacity to contract; and
- (d) that the instrument is at the time of his indorsement valid and subsisting
- Even on the assumption that the appellant is a mere accommodation party, as he professes to be, he is by the clear mandate of section 29 of the Negotiable Instruments Law, "liable on the instrument to a holder for value, notwithstanding that such holder at the time of taking the instrument knew him to be only an accommodation party."
- It is not a valid defense that the accommodation party did not receive any valuable consideration when he executed the instrument.
- Nor is it correct to say that the holder for value is not a holder in due course merely because at the time he acquired the instrument, he knew that the indorser was only an accommodation party.
- assuming him to be an accommodation indorser, may obtain security from the maker to protect himself against the danger of insolvency of the latter, cannot in any manner affect his liability to the Tiong, as the said remedy is a matter of concern exclusively between accommodation indorser and accommodated party.
- The liability of the appellant remains primary and unconditional.