G.R. No.

L-26001 October 29, 1968

PHILIPPINE NATIONAL BANK, petitioner,

vs.
THE COURT OF APPEALS and PHILIPPINE COMMERCIAL AND INDUSTRIAL BANK, respondents.

FACTS:

GSIS advised PNB that a check bearing check number 645915- B has been lost. Augusto Lim, holding the GSIS
Check which was in the amount of P57,415.00, went to PCIB to have the check deposited in his account. Lim
cannot withdraw the amount yet as it needs clearing. PCIB stamped the check with All prior indorsements
and/or Lack of Endorsement Guaranteed, Philippine Commercial and Industrial Bank. PCIB then sent the check
to PNB for clearing. PNB did not act on the check but it paid PCIB the amount of the check. PCIB considered
this as a manifestation that the check was good hence it cleared Lim to withdraw the amount.

On January 31, 1962, GSIS demanded PNB to restore the amount and PNB complied. PNB then demanded
PCIB to refund the amount of the check. PCIB refused. The lower court ruled in favor of PCIB. This was affirmed
by the Court of Appeals. PNB argued that the indorsements are forged hence it has no liability.

ISSUE: Whether or not PCIB should refund the amount to PNB.

HELD: No. The question whether or not the indorsements have been falsified is immaterial to PNBs liability as a
drawee or to its right to recover from the PCIB for, as against the drawee, the indorsement of an intermediate
bank does not guarantee the signature of the drawer, since the forgery of the indorsement is not the cause of the
loss.

With respect to the warranty on the back of the check, it should be noted that the PCIB thereby guaranteed all
prior indorsements, not the authenticity of the signatures of the officers of the GSIS who signed on its behalf,
because the GSIS is not an indorser of the check, but its drawer. Further, PNB has been negligent. It has been
notified months before about the lost check.

G.R. No. L-26767 February 22, 1968

ANG TIONG, plaintiff-appellee,

vs.
LORENZO TING, doing business under the name and style of PRUNES PRESERVED MFG., and FELIPE
ANG, defendants.
FELIPE ANG, defendant-appellant.

FACTS:

In August 1960, Lorenzo Ting issued a check in the amount of P4,000.00 payable to cash or bearer. At the back
of the check, Felipe Ang affixed his signature. The check later on ended up in the hands of Ang Tiong. When
Tiong presented the check with the bank, it was dishonored. Tiong then sued Lorenzo and Felipe. Tiong won the
collection suit. Felipe appealed on the ground that he should be allowed to recover from Lorenzo because Felipe
is a guarantor and not an indorser. Felipe also avers, in the alternative, that he is a mere accommodation party
and that fact is known by Tiong. As such, Tiong should make Lorenzo the person directly and primarily liable, not
Felipe.

ISSUE: Whether or not Felipes arguments are correct.

HELD: No. The check is a negotiable instrument and what governs the transaction is the Negotiable Instruments
Law (NIL) and not the Civil Code provisions on guaranty. Felipe is not a guarantor. Under Section 63 of the NIL a
person signing in blank a negotiable instrument, such as the check in this case, is considered as a general
indorser. All Felipe did is to affix his signature at the back of the check such already qualifies as a blank
indorsement. A person placing his signature upon an instrument otherwise than as maker, drawer or acceptor is
a general indorser, unless he clearly indicates plaintiff appropriate words his intention to be bound in some
other capacity, which he did not do. And section 66 ordains that every indorser who indorses without
qualification, warrants to all subsequent holders in due course (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. In addition, he engages that on
due presentment, it shall be accepted or paid, or both, as the case may be, and that if it be dishonored, he will
pay the amount thereof to the holder.