NEGOTIABLE INSTRUMENTS NOTES

BASED ON AGBAYANI’S BOOK AND ATTY. MERCADO’S LECTURES

Page 83 of 190

BY: MA. ANGELA LEONOR C. AGUINALDO

ATENEO LAW 2D BATCH 2010

o That the payee was insane, a minor, or a corporation acting ultra vires because by making the note, he admits the then capacity of the payee to indorse

CASE DIGESTS: SECTION 60

110 PNB V. MAZA AND MACENAS

48 PHIL 207

FACTS: Maza and Macenas executed a total of five promissory notes. These were not paid at maturity. And to recover the amounts stated on the face of the promissory notes, PNB initiated an action against the two. The special defense posed by the two is that the promissory notes were delivered to them in blank by a certain Enchaus and were made to sign the notes so that the latter could secure a loan from the bank. They also alleged that they never negotiated the notes with the bank nor have they received any value thereof. They also prayed that Enchaus be impleaded in the complaint but such was denied. The trial court then held in favor of the bank. HELD: The defendants attested to the genuineness of the instruments sued on. Neither did they point out any mistake in regard to the amount and interest that the lower court sentenced them to pay. Given such, the defendants are liable. They appear as the makers of the promissory notes and as such, they must keep their engagement and pay as promised. And assuming that they are accommodation parties, the defendants having signed the instruments without receiving value thereof, for the purpose of lending their names to some other person, are still liable for the promissory notes. The law now is such that an accommodation party cannot claim no benefit as such, but he is liable according to the face of his undertaking, the same as he himself financially interest in the transaction. It is also no defense to say that they didn't receive the value of the notes. To fasten liability however to an accommodation maker, it is not necessary that any consideration should move to him. The accommodation which supports the promise of the accommodation maker is that parted with by the person taking the note and received by the person accommodated. 111 ARANETA V. PEREZ

14 SCRA 498

FACTS:

Perez executed a promissory note in favor of Araneta. Perez failed to pay upon maturity of the note and despite demands, still failed to pay. Araneta was then prompted to file a case against him. As defense, he alleged that the proceeds were used to pay for the medical treatment of his daughter who was then the beneficiary of the trust then administered by Araneta. Perez was adjudged to pay Araneta. And by virtue of this judgment, Perez filed a case against Araneta for reimbursement for his alleged advances for the medical treatment of his daughter. HELD: Perez bound himself to pay personally said promissory note which he cannot shift to another without the consent of the payee. Such is the undertaking of the maker. The maker of a negotiable instrument by making it engages that he will pay it according to the tenor and admits the existence of the payee and his then capacity to indorse. Given such, Perez could not now escape his liability by alleging that he spent the money for the treatment of his daughter since it is not the concern of the payee how the said proceeds would be spent. This is the sole concern of the maker. The interest of the payee is the payment of the instrument. 112 TAN SIN V. YU BIAO

56 PHIL 707 FACTS: Plaintiff were the heirs of Sontuan while the defendant is the partnership to which he belonged. After his death, there was dispute over the share of the heirs correlative the share of the deceased partner in the partnership. An agreement was made between the surviving partners and heirs. There was liquidation of the deceased’s share. The share was then retained in the hands of the partnership in the nature of a loan, which was secured by a promissory note. The partnership defaulted in payment and this prompted the heirs to file a case against them. Judgment was rendered against the partnership and the other solidary maker. The solidary maker appealed and averred that he signed the note by mistake only. HELD: Inasmuch as the appellant is a businessman and is of age, he is presumed to have acted with due care, and to have signed the document in question with full knowledge of its contents. And this presumption of law is not overcome by the evidence adduced by the appellant, consisting in his own testimony. There being no evidence of fraud, and the appellant having admitted to the genuineness of his signature, the same must be given legal effects.