Nature of liability

Active
Passive

Liability vs. Warranty

Indorsement by agent/ two indorsees

• Agent
• Indorsees

• Who is a qualified indorser?

Maralit vs. Imperial GR No. 130756

FACTS:

Petitioner Ester B. Maralit filed three complaints for estafa through falsification of commercial
documents through reckless imprudence against respondent Jesusa Corazon L. Imperial.
Maralit alleged that she was assistant manager of the Naga City branch of the PNB; that on
May 20, 1992, June 1, 1992, and July 1, 1992 respondent Imperial separately deposited in her
savings account at the PNB three United States treasury warrants and on the same days
withdrew their peso equivalent of P59,216.86, P130,743.60, and P130,326.00, respectively;
and that the treasury warrants were subsequently returned one after the other by the United
States Treasury, through the Makati branch of the Citibank, on the ground that the amounts
thereof had been altered. Maralit claimed that, as a consequence, she was held personally
liable by the PNB for the total amount of P320,287.30.

In her counter-affidavit, respondent claimed that she merely helped a relative, Aida Abengoza,
encash the treasury warrants; that she deposited the treasury warrants in her savings account
and then withdrew their peso equivalent with the approval of petitioner; that she gave the
money to Aida Abengoza; that she did not know that the amounts on the treasury warrants
had been altered nor did she represent to petitioner that the treasury warrants were genuine;
and that upon being informed of the dishonor of the warrants she immediately contacted Aida
Abengoza and signed an acknowledgment of debt promising to pay the total amount of the
treasury warrants.

MTC acquitted Imperial but held her civilly liable as indorser of the checks which are the
subject matter of the criminal action. The RTC held that the decision of the MTC did not really
find respondent liable for P320,286.46 because in fact it was petitioner who was found
responsible for making the defraudation possible.

ISSUE:

Whether or not respondent is civilly liable as indorser of the checks subject matter of the
criminal action.

RULING:
The Court symphatizes with the complainant that there was indeed damage and loss, but said
loss is chargeable to the accused who upon her indorsements warrant that the instrument is
genuine in all respect what it purports to be and that she will pay the amount thereof in case
of dishonor. (Sec. 66 Negotiable Instrument Law)

Thus, while the MTC found petitioner partly responsible for the encashment of the altered
checks, it found respondent civilly liable because of her indorsements of the treasury warrants,
in addition to the fact that respondent executed a notarized acknowledgment of debt
promising to pay the total amount of said warrants.

Associated Bank vs. Tan GR No. 156940

FACTS:
Respondent Tan is a businessman and a regular depositor-creditor of the petitioner, Associated
Bank. Sometime in September 1990, he deposited a postdated check with the petitioner in the
amount of P101,000 issued to him by a certain Willy Cheng from Tarlac. The check was duly
entered in his bank record. Allegedly, upon advice and instruction of petitioner that
theP101,000 check was already cleared and backed up by sufficient funds, respondent, on the
same date, withdrew the sum of P240,000 from his account leaving a balance of P57,793.45. A
day after, TAN deposited the amount of P50,000 making his existing balance in the amount of
P107,793.45, because he has issued several checks to his business partners. However, his
suppliers and business partners went back to him alleging that the checks he issued bounced
for insufficiency of funds. Thereafter, respondent informed petitioner to take positive steps
regarding the matter for he has adequate and sufficient funds to pay the amount of the subject
checks. Nonetheless, petitioner did not bother nor offer any apology regarding the incident.
Respondent Tan filed a Complaint for Damages on December 19, 1990, with the RTC against
petitioner. The trial court rendered a decision in favor of respondent and ordered petitioner
to pay damages and attorney’s fees. Appellate court affirmed the lower court’s decision.
CA ruled that the bank should not have authorized the withdrawal of the value of the
deposited check prior to its clearing. Petitioner filed a Petition for Review before the Supreme
Court.

ISSUE: W/N petitioner has the right to debit the amount of the dishonored check from the
account of respondent on the ground that the check was withdrawn by respondent prior to its
clearing

HELD: The Petition has no merit. The real issue here is not so much the right of petitioner to
debit respondent’s account but, rather, the manner in which it exercised such right. Banks are
granted by law the right to debit the value of a dishonored check from a depositor’s account
but they must do so with the highest degree of care, so as not to prejudice the depositor
unduly. The degree of diligence required of banks is more than that of a good father of a
family where the fiduciary nature of their relationship with their depositors is concerned. In
this case, petitioner did not treat respondent’s account with the highest degree of care.
Respondent withdrew his money upon the advice of petitioner that his money was already
cleared. It is petitioner’s premature authorization of the withdrawal that caused the
respondent’s account balance to fall to insufficient levels, and the subsequent dishonor
of his own checks for lack of funds

People vs. Julia Maniego GR No. L-30190

Facts:
Defendant, was acquitted on the crime of malversation of public fund due to reasonable
doubt. The judgement however still found the defendant civilly liable for the amount
malversed. Defendant appealed the said judgement, contending that she was just a mere
indorser of the said checks issued against the funds of the government. The CA certified the
this said case to the sc as it was purely a question of law.

Issue:
Whether the Petitioner is civilly liable for being a mere indorser on account of the dishonor of
the checks indorsed by her

Held:
Yes, the holder or last indorsee of a negotiable instrument has the right to “enforce payment
of the instrument for the full amount thereof against all parties liable thereon.” Among the
“parties liable thereon” is an indorser of the instrument i.e., “a person placing his signature
upon an instrument otherwise than as maker, drawer, or acceptor ** unless he clearly
indicates by appropriate words his intention to be bound in some other capacity. “Such an
indorser “who indorses without qualification,” inter alia “engages that on due presentment, **
(the instrument) shall be accepted or paid, or both, as the case may be, according to its tenor,
and that if it be dishonored, and the necessary proceedings on dishonor be duly taken, he will
pay the amount thereof to the holder, or to any subsequent indorser who may be compelled to
pay it.” Maniego may also be deemed an “accommodation party” in the light of the facts, i.e., a
person “who has signed the instrument as maker, drawer, acceptor, or indorser, without
receiving value therefor, and for the purpose of lending his name to some other person.”

RN Clark vs. Sellner GR No. 16477

Fact:
Plaintiff, obtained a promissory note signed by W. H. Clark and the defendant. When the notes
fell due, no payment was remitted to the Plaintiff. The plaintiff filed an action against the
defendant for the collection of the said note. The defendant argued that he is only an
accommodating party and not liable to pay the amount due. He also argued that he did not
received the said value, hence this case.

Issue:
Whether the Defendant was an accommodating party and is not liable to pay the Negotiable
Instrument.

Held:
No, the defendant is not an accommodating party and is liable to pay the said instrument. it
should be taken into account that by putting his signature to the note, he lent his name, not to
the creditor, but to those who signed with him placing himself with respect to the creditor in
the same position and with the same liability as the said signers. It should be noted that the
phrase “without receiving value therefor,” as used in section 29 of the aforesaid Act, means
“without receiving value by virtue of the instrument” and not, as it apparently is supposed to
mean, “without receiving payment for lending his name.” If, as in the instant case, a sum of
money was received by virtue of the note, it is immaterial, so far as the creditor is concerned,
whether one of the singers has, or has not, received anything in payment of the use of his
name. In reality the legal situation of the defendant in this case may properly be regarded as
that of a joint surety rather than that of an accommodation party. The defendant, as a joint
surety, may, upon the maturity of the note, pay the debt, demand the collateral security and
dispose of it to his benefit; but there is no proof whatever that this was done. As to the
plaintiff, he is the “holder for value,” under the phrase of said section 29, for he had paid the
money to the signers at the time the note was executed and delivered to him.

Maulini vs. Serrano GR No. 8844

Fact:
Defendant obtained a promissory note from various makers and indorsed it to the plaintiff. The
plaintiff uses the defendant as an accommodating party for him to he the recipient of the said
notes then later, the notes is indorsed to him. The plaintiff then filed a case against the
defendant, and making him liable for then unpaid notes. The trial court found the defendant
liable in accordance to article 29 of the negotiable instrument which accommodation party as
“one who has signed the instrument as maker, drawer, acceptor, or indorser, without receiving
value therefor, and for the purpose of lending his name to some other person. Such a person is
liable on the instrument to a holder for value, notwithstanding such holder at the time of
taking the instrument knew the same to be only an accommodation party.” hence, this case.

Issue:
Whether the defendant, an accommodating party, is liable to the payee.

Held:
No, The accommodation to which reference is made in section is not one to the person who
takes the note — that is, the payee or indorsee, but one to the maker or indorser of the note.
It is true that in the case at bar it was an accommodation to the plaintiff, in a popular sense, to
have the defendant indorse the note; but it was not the accommodation described in the law,
but, rather, a mere favor to him and one which in no way bound Serrano. In cases of
accommodation indorsement the indorser makes the indorsement for the accommodation of
the maker. Such an indorsement is generally for the purpose of better securing the payment of
the note — that is, he lend his name to the maker, not to the holder. Putting it in another way:
An accommodation note is one to which the accommodation party has put his name, without
consideration, for the purpose of accommodating some other party who is to use it and is
expected to pay it. The credit given to the accommodation part is sufficient consideration to
bind the accommodation maker. Where, however, an indorsement is made as a favor to the
indorsee, who requests it, not the better to secure payment, but to relieve himself from a
distasteful situation, and where the only consideration for such indorsement passes from the
indorser to the indorsee, the situation does not present one creating an accommodation
indorsement, nor one where there is a consideration sufficient to sustain an action on the
indorsement.

Town Savings vs. CA GR No. 106011

FACTS:
Spouses Hipolito applied for and was granted a loan by the bank, which was secured by
a promissory note. For failure to pay their monthly payments, they were declared in
default.

The spouses denied having any liability. They stated that the real party-in-interest is the
sister of the husband, Pilarita Reyes. The spouses, not having received part of the loan,
were mere guarantors of Reyes. As such, they protested against being dragged into the
litigation.
The trial court held that they were liable as accommodation parties to the promissory note.
This was reversed by the Court of Appeals.

HELD:
An accommodation party is one who has signed the instrument as maker, drawer, indorser,
without receiving value therefore and for the purpose of lending his name to some other
person. Such person is liable on the instrument to a holder for value, notwithstanding such
holder, at the time of the taking of the instrument knew him to be an accommodation party.
In lending his name to the accommodated party, the accommodation party is in effect a
surety for the latter. He lends his name to enable the
accommodated party to obtain credit or to raise money. He receives no part of the
consideration for the instrument but assumes liability to the other parties thereto because
he wants to accommodate another.

In the case at bar, it is indisputable that the spouses signed the promissory note to enable
Reyes to secure a loan from the bank. She was the actual beneficiary of the loan and the
spouses accommodated her by signing the
note.