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QUIRINO GONZALES LOGGING CONCESSIONAIRE v. THE COURT OF APPEALS. G.R.

No. 126568. April 30, 2003.

FACTS: Petitioner Quirino Gonzales Logging Concessionaire (QGLC) applied for credit
accommodation which the Bank approved. Their obligation was secured by a real estate
mortgage of parcels of land. QGLC executed a promissory note in which they defaulted. The
Bank foreclosed the property and was subsequently owned by the Bank. The Bank then filed
a complaint for a sum of money in regards to the unpaid notes.

The notes were payable 30 days after date and provided for the solidary liability in their non-
payment at maturity. Petitioners deny having received the value of the promissory notes.

The RTC sided with petitioner but the CA reversed the decision.

ISSUE: Whether the promissory notes were valid.

RULING: Petitioner claims that they signed the notes in blank but did not receive the value
of the notes. They also admit the genuineness and due execution of the notes. The promissory
notes were negotiable as they met the requirements of Sec. 1 of the NIL. The notes are prima
facie deemed to have issued for consideration.

In any case, it is no defense that the promissory notes were signed in blank as Section 14 of
the Negotiable Instruments Law concedes the prima facie authority of the person in
possession of negotiable instruments, such as the notes herein, to fill in the blanks. The SC
remanded the issue concerning the notes to the court of origin.

Quirino Gonzales, et, al. vs. Court of Appeals, et, al. - GR No. 126568 Case Digest

Facts: Petitioners applied for credit accommodations with respondent bank, which the
bank approved granting a credit line of Php900,000.00. Petitioners obligations were secured
by a real estate mortgage on four parcels of land. Also, petitioners had made certain advances
in separate transactions from the bank in connection with QGLCs exportation of logs and
executed a promissory note in 1964.

Due to petitioners long default in the payment of their obligations under the credit line, the
bank foreclosed the mortgage and sold the properties covered to the highest bidder in the
auction. Respondent bank, alleging non-payment of the balance of QGLCs obligation after
the proceedings of the foreclosure sale were applied and non-payment of promissory notes
despite repeated demands, filed a complaint for sum of money against petitioners.

Petitioners, on the other hand, asserted that the complaint states no cause of action and
assuming that it does, the same is barred by prescription or void for want of consideration.

Issue: Whether or not the cause of action is barred by prescription.


Held: An action upon a written contract, an obligation created by law, and a judgment must be
brought within 10 years from the time the right of action accrues.

The finding of the trial court that more than ten years had elapsed since the right to bring an
action on the Banks first to sixth causes had arisen is not disputed. The Bank contends,
however, that the notices of foreclosure sale in the foreclosure proceedings of 1965 are
tantamount to formal demands upon petitioners for the payment of their past due loan
obligations with the Bank; hence, said notices of foreclosure sale interrupted the running of
the prescriptive period.

The Banks contention has no merit. Prescription of actions is interrupted when they are filed
before the court, when there is a written extrajudicial demand by the creditors, and when there
is any written acknowledgment of the debt by the debtor. The law specifically requires a written
extrajudicial demand by the creditor which is absent in the case at bar. The contention that the
notices of foreclosure are tantamount to a written extrajudicial demand cannot be appreciated,
the contents of said notices not having been brought to light.

But even assuming that the notices interrupted the running of the prescriptive period, the
argument would still not lie for the following reasons: The Bank seeks the recovery of the
deficient amount of the obligation after the foreclosure of the mortgage. Such suit is in the
nature of a mortgage action because its purpose is to enforce the mortgage contract. A
mortgage action prescribes after ten years from the time the right of action accrued.

The law gives the mortgagee the right to claim for the deficiency resulting from the price
obtained in the sale of the property at public auction and the outstanding obligation
proceedings. In the present case, the Bank, as mortgagee, had the right to claim payment of
the deficiency after it had foreclosed the mortgage in 1965. as it filed the complaint only on
January 27, 1977, more than ten years had already elapsed, hence, the action had then
prescribed.

Borromeo vs. Sun G.R. No. 75908 October 22, 1999


PURISIMA, J

Facts: Amancio Sun brought before the then Court of the First Instance of Rizal an action
against Lourdes O. Borromeo (in her capacity as corporate secretary), Federico O. Borromeo
and Federico O. Borromeo (F.O.B.), Inc., to compel the transfer to his name in the books of
F.O.B., Inc., shares of stock registered in the name of Federico O. Borromeo, as evidenced
by a Deed of Assignment. Private respondent averred that all the shares of stock of F.O.B.
Inc. registered in the name of Federico O. Borromeo belong to him, as the said shares were
placed in the name of Federico O. Borromeo 'only to give the latter personality and importance
in the business world.' On the other hand, petitioner Federico O. Borromeo disclaimed any
participation in the execution of the Deed of Assignment, theorizing that his supposed
signature thereon was forged. LL
The lower court of origin came out with a decision declaring the questioned signature on
subject Deed of Assignment as the genuine signature of Federico O. Borromeo. After
considering the testimonies of the two expert witnesses for the parties and after a careful and
judicious study and analysis of the questioned signature as compared to the standard
signatures. On appeal by petitioners, the Court of Appeals adjudged as forgery the
controverted signature of Federico O. Borromeo. Amancio Sun interposed a motion for
reconsideration of the said decision, contending that Segundo Tabayoyong, petitioners' expert
witness, is not a credible witness. Acting on the aforesaid motion for reconsideration, the Court
of Appeals reconsidered its decision.
Issue: WON the signature of Frederico O. Borromeo in the Deed of Assignments is a
genuine signature.
Held: Pertinent records reveal that the subject Deed of Assignment is embodied in blank
form for the assignment of shares with authority to transfer such shares in the books of the
corporation. It was clearly intended to be signed in blank to facilitate the assignment of shares
from one person to another at any future time. This is similar to Section 14 of the Negotiable
Instruments Law where the blanks may be filled up by the holder, the signing in blank being
with the assumed authority to do so. Indeed, as the shares were registered in the name of
Federico O. Borromeo just to give him personality and standing in the business community,
private respondent had to have a counter evidence of ownership of the shares involved. Thus,
the execution of the deed of assignment in blank, to be filled up whenever needed. The same
explains the discrepancy between the date of the deed of assignment and the date when the
signature was affixed thereto.
While it is true that the 1974 standard signature of Federico O. Borromeo is to the naked eye
dissimilar to his questioned signature circa 1954-1957, which could have been caused by
sheer lapse of time, Col. Jose Fernandez, respondent's expert witness, found the said
signatures similar to each other after subjecting the same to stereomicroscopic examination
and analysis because the intrinsic and natural characteristic of Federico O. Borromeo's
handwriting were present in all the exemplar signatures used by both Segundo Tabayoyong
and Col. Jose Fernandez.

Bank of America vs. Philippine Racing Club


G.R. 150228 July 30, 2009
Ponente: Leonardo-De Castro, J:

Facts:

1. Plaintiff PRCI is a domestic corporation which maintains a current account with petitioner
Bank of America. Its authorized signatories are the company President and Vice-President.
By virtue of a travel abroad for these officers, they pre-signed checks to accommodate any
expenses that may come up while they were abroad for a business trip. The said pre-signed
checks were left for safekeeping by PRCs accounting officer. Unfortunately, the two (2) of said
checks came into the hands of one of its employees who managed to encash it with petitioner
bank. The said check was filled in with the use of a check-writer, wherein in the blank for the
'Payee', the amount in words was written, with the word 'Cash' written above it.
2. Clearly there was an irregularity with the filling up of the blank checks as both showed similar
infirmities and irregularities and yet, the petitioner bank did not try to verify with the corporation
and proceeded to encash the checks.

3. PRC filed an action for damages against the bank. The lower court awarded actual and
exemplary damages. On appeal, the CA affirmed the lower court's decision and held that the
bank was negligent. Hence this appeal. Petitioner contends that it was merely doing its
obligation under the law and contract in encashing the checks, since the signatures in the
checks are genuine.

Issue: Whether or not the petitioner can be held liable for negligence and thus should
pay damages to PRC

Both parties are held to be at fault but the bank has the last clear chance to prevent the
fraudulent encashment hence it is the one foremost liable .

1. There was no dispute that the signatures in the checks are genuine but the presence of
irregularities on the face of the check should have alerted the bank to exercise caution before
encashing them. It is well-settled that banks are in the business impressed with public interest
that they are duty bound to protect their clients and their deposits at all times. They must treat
the accounts of these clients with meticulousness and a highest degree of care considering
the fiduciary nature of their relationship. The diligence required of banks are more than that of
a good father of a family.

2. The PRC officers' practice of pre-signing checks is a seriously negligent and highly risky
behavior which makes them also contributor to the loss. It's own negligence must therefore
mitigate the petitioner's liability. Moreover, the person who stole the checks is also an
employee of the plaintiff, a cleck in its accounting department at that. As the employer, PRC
supposedly should have control and supervision over its own employees.

3. The court held that the petitioner is liable for 60% of the total amount of damages while PRC
should shoulder 40% of the said amount.

VICENTE R. DE OCAMPO & CO. v. ANITA GATCHALIAN. G.R. No. L-15126. November 30,
1961.

FACTS: Anita Gatchalian was interested in buying a car. Manuel Gonzales offered to her
a car owned by plaintiff. Gonzales claimed that he was authorized by the plaintiff to sell the
car. Gonzales order defendant to issue a cross-check to comply on showing interest in buying
the car. Gonzales promised to return the check the next day.

When Gonzales never appeared after, defendant issue a stop payment order on the check.
She found out that Gonzales used the check as payment to plaintiff's clinic for his wife's fees.
Plaintiff now demands defendant for payment of the check, in which defendant refused citing
that plaintiff is a not a holder in due course.
The lower court held that defendant should pay plaintiff.

ISSUE: Whether or not De Ocampo is a holder in due course.

RULING:

The SC held that plaintiff is a not a holder in due course. There were obvious instances to
show that the check was negligently acquired like plaintiff having no liability with defendant
and that the check was crossed. Plaintiff failed to exercise prudence and caution. Plaintiff
should have asked questions to further inquire upon suspicion.

The presumption of good faith did not apply to plaintiff because the defect was apparent on
the instruments face it was not payable to defendant or bearer.

De Ocampo vs. Gatchalian (3 SCRA 596)


Facts: Anita Gatchalian was interested in buying a car when she was offered by Manuel
Gonzales to a car owned by the Ocampo Clinic. Gonzales claim that he was duly authorized
to look for a buyer, negotiate and accomplish the sale by the Ocampo Clinic. Anita accepted
the offer and insisted to deliver the car with the certificate of registration the next day but
Gonzales advised that the owners would only comply only upon showing of interest on the part
of the buyer. Gonzales recommended issuing a check (P600 / payable-to-bearer /cross-
checked) as evidence of the buyers good faith. Gonzales added that it will only be for
safekeeping and will be returned to her the following day.

The next day, Gonzales never appeared. The failure of Gonzales to appeal resulted in
Gatchalian to issue a STOP PAYMENT ORDER on the check. It was later found out that
Gonzales used the check as payment to the Vicente de Ocampo (Ocampo Clinic) for the
hospitalization fees of his wife (the fees were only P441.75, so he got a refund of P158.25).
De Ocampo now demands payment for the check, which Gatchalian refused, arguing that de
Ocampo is not a holder in due course and that there is no negotiation of the check.

The Court of First Instance ordered Gatchalian to pay the amount of the check to De Ocampo.
Hence this case.

Issue: Whether or not De Ocampo is a holder in due course.

Held: NO. De Ocampo is not a holder in due course. De Ocampo was negligent in his
acquisition of the check. There were many instances that arouse suspicion: the drawer in the
check (Gatchalian) has no liability with de Ocampo ; it was cross-checked(only for deposit) but
was used a payment by Gonzales; it was not the exact amount of the medical fees.
The circumstancesshould have led him to inquire on the validity of the check. However, he
failed to exercise reasonable prudence and caution.

In showing a person had knowledge of facts that his


action in taking the instrument amounted to bad faith need not prove that he knows the exact
fraud. It is sufficient to show that the person had NOTICE that there was something wrong.
The bad faith here means bad faith in the commercial sense obtaining an instrument with no
questions asked or no further inquiry upon suspicion.

The presumption of good faith did not apply to de Ocampo because the defect was apparent
on the instruments face it was not payable to Gonzales or bearer. Hence, the holders title is
defective or suspicious. Being the case, de Ocampo had the burden of proving he was a holder
in due course, but failed.

Sapiera vs Court of Appeals


[G.R. No. 128927. September 14, 1999]

FACTS:
Petitioner Remedios Sapiera, a sari-sari store owner, was issued by one Arturo de Guzman
checks as payment for purchases he made at her store. She used said checks to pay for
certain items she purchased from the grocery store of Ramon Sua. These checks were signed
at the back by petitioner. When presented for payment the checks were dishonored because
the drawers account was already closed. Sua informed Arturo de Guzman and petitioner
about the dishonor but both failed to pay the value of the checks. Petitioner was acquitted in
the charge of estafa filed against her but she was found liable for the value of the checks.

ISSUE:
Whether petitioner is liable for the value of the checks even if she signed the subject checks
only for the identification of the signature of Arturo de Guzman.

RULING:
Petitioner is liable for the value of the checks. As she (petitioner) signed the subject checks
on the reverse side without any indication as to how she should be bound thereby, she is
deemed to be an unqualified indorser thereof. Every indorser who indorses without
qualification, warrants to all subsequent holders in due course that, on due presentment, it
shall be accepted or paid or both, 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.

Sapiera vs Court of Appeals

Facts: Remedios Nota Sapiera, a sari-sari store owner, on several occasions, purchased from
Monrico Mart grocery items, mostly cigarettes and paid for them with checks issued by one
Arturo de Guzman. These checks were signed by Sapiera on the back. When they were
presented for payment, the checks were dishonoured because the drawers account was
already closed. Respondent Ramon Samua informed Arturo de Guzman and petitioner but
both failed to pay. Hence, four charges of Estafa were filed against Sapiera while two counts
of BP 22 was filed against Arturo de Guzman. These cases were consolidated. On December
27 1999, the RTC Dagupan city acquitted Sapiera of all charges of Estafa but did not rule on
the civil aspect of the case. Arturo de Guzman was held liable for the 2 BP 22 cases and was
ordered to pay Sua 167,150 Php as civil indemnity and was sentenced for imprisonment of 6
months and 1 day. Respondent Sua appealed regarding the civil aspect of Sapieras case but
the courtdenied it saying that the acquittal of petitioner was absolute. Respondent filed a
petition for mandamus with the Court of Appeals praying that the appeal be given due course,
this was granted. On January 1996, CA rendered a decision ordering Sapiera to pay 335000
php to Sua. Sapiera filed a motion for reconsideration. The CA the issued a resolution noting
that the admission of both parties that Sua already collected 125000 for the 2 check paid by
De Guzman on the BP 22 cases. It appears that the payment should be deducted on her
liability as they involved the same two checks which Sapiera was involved in. the CA deducted
the liability to 210,000 Php. Hence this petition by Sapiera claiming that the CA erred in
rendering such decision because she was acquitted and the fact from which the civil liability
exists did not exist.

Issue: Whether or not Sapiera could be held civilly liable when she was acquitted in
the criminal charges against her.

Held: Yes. Sec. 2 of rule 111 of the rules of court provides that extinction of the penal action
does not carry with it the extinction of the civil, unless this shows that the fact from which the
civil liability is based is proven to not have existed because of such acquittal. Civil liability is
not extinguished where: (a) the acquittal is not based on reasonable doubt. (b) Where the court
expressly declares that the liability is not criminal but only civil, (c) where the civil liability is not
derived from or based on the criminal act. The decision of the case would show that the
acquittal was based on failure of the prosecution to present sufficient evidence showing
conspiracy between her and De Guzman. Since all checks were signed by Sapiera on the
back, sec 17 of Negotiable instruments law says that she would be considered an indorser of
the bill of exchange and under section 66 thereof would be held liable for breach of warranty
and is held liable to pay the holder who may be compelled to pay the instrument.
ADALIA FRANCISCO vs. COURT OF APPEALS, ET AL.
G.R. No. 116320 November 29, 1999

FACTS:
A. Francisco Realty & Development Corporation (AFRDC), of which petitioner
Francisco is the president, entered into a Land Development and Construction
Contract with private respondent Herby Commercial & Construction Corporation
(HCCC), represented by its President and General Manager private respondent
Ong. Under the contract, HCCC was to be paid on the basis of the completed
houses and developed lands delivered to and accepted by AFRDC and the
GSIS. Sometime in 1979, Ong discovered that Diaz and Francisco, the Vice-
President of GSIS, had executed and signed seven checks of various dates and
amounts payable to HCCC for completed and delivered work under the contract.
Ong, however, claims that these checks were never delivered to HCCC. It turned
out that Francisco forged the indorsement of Ong on the checks and indorsed the
checks for a second time by signing her name at the back of the checks, petitioner
then deposited said checks in her savings account. A case was brought by private
respondents against petitioner to recover the value of said checks. Petitioner
however claims that she was authorized to sign Ong's name on the checks by virtue
of the Certification executed by Ong in her favor giving her the authority to collect
all the receivables of HCCC from the GSIS, including the questioned checks.

ISSUE:
Whether petitioner cannot be held liable on the questioned checks by virtue of the
Certification executed by Ong giving her the authority to collect such checks from
the GSIS.

RULING:
Petitioner is liable. The Negotiable Instruments Law provides that where any
person is under obligation to indorse in a representative capacity, he may indorse
in such terms as to negative personal liability. An agent, when so signing, should
indicate that he is merely signing in behalf of the principal and must disclose the
name of his principal; otherwise he shall be held personally liable. Even assuming
that Francisco was authorized by HCCC to sign Ong's name, still, Francisco did not
indorse the instrument in accordance with law. Instead of signing Ong's name,
Francisco should have signed her own name and expressly indicated that she was
signing as an agent of HCCC. Thus, the Certification cannot be used by Francisco
to validate her act of forgery.
Francisco V. CA (1999)
G.R. No. 116320 November 29, 1999
Lessons Applicable: Forgery (Negotiable Instruments Law)

FACTS:
June 23, 1977: Adalia Francisco (Francisco) president of A. Francisco Realty &
Development Corporation (AFRDC) and Jaime C. Ong (Ong) President and
General Manager of Herby Commercial & Construction Corporation (HCCC),
entered into a contract where HCCC agreed to undertake the construction of 35
housing units and the development of 35 hectares of land.

HCCC was to be paid on turn-key basis (basis of the completed houses and
developed lands delivered to and accepted by AFRDC and the GSIS)

To facilitate payment, AFRDC executed a Deed of Assignment in favor of HCCC to


enable it to collect payments directly from the GSIS.

Furthermore, the GSIS and AFRDC put up an Executive Committee Account with
the Insular Bank of Asia & America (IBAA) of P4M from which checks would be
issued and co-signed by petitioner Francisco and the GSIS Vice-President Armando
Diaz (Diaz).

February 10, 1978: HCCC filed a complaint w/ the RTC against Francisco, AFRDC
and the GSIS for the collection of the unpaid balance under the Land Development
and Construction Contract in the amount of P515,493.89 for completed and
delivered housing units and land development.

Sometime in 1979: Ong discovered that Diaz and Francisco had executed and
signed 7 checks drawn against the IBAA and payable to HCCC but were never
delivered to HCCC

GSIS gave Francisco custody of the checks since she promised that she would
deliver the same to HCCC.

Francisco forged the signature of Ong, without his knowledge or consent, at the
dorsal portion of the said checks to make it appear that HCCC had indorsed the
checks; Francisco then indorsed the checks for a second time by signing her name
at the back of the checks and deposited the checks in her IBAA savings account

June 7, 1979: Ong filed complaints charging Francisco with estafa thru falsification
of commercial documents - dismmised by the Assistant City Fiscal
According to Francisco, she agreed to grant HCCC the loans in the total amount of
P585K and covered by 18 promissory notes in order to obviate the risk of the non-
completion of the project.

As a means of repayment, Ong allegedly issued a Certification authorizing


Francisco to collect HCCCs receivables from the GSIS

RTC: favored Ong and against IBAA and Francisco. November 21, 1989: IBAA and
HCCC entered into a Compromise Agreement which was approved by the trial court,
wherein HCCC acknowledged receipt of the amount of P370,475.00 in full
satisfaction of its claims against IBAA, without prejudice to the right of IBAA to
pursue its claims against Francisco.

CA affirmed RTC. Francisco claims that she was, in any event, authorized to sign
Ongs name on the checks by virtue of the Certification executed by Ong in her favor
giving her the authority to collect all the receivables of HCCC from the GSIS,
including the questioned checks.

ISSUE: W/N Francisco can sign Ongs name on the checks and it was not forgery

HELD: NO. Francisco had custody of the checks, as proven by the check vouchers
bearing her uncontested signature. Francisco forged the signature of Ong on the
checks to make it appear as if Ong had indorsed said checks. The Negotiable
Instruments Law provides that where any person is under obligation to indorse in a
representative capacity, he may indorse in such terms as to negative personal
liability. An agent, when so signing, should indicate that he is merely signing in
behalf of the principal and must disclose the name of his principal; otherwise he
shall be held personally liable. Instead of signing Ongs name, Francisco should
have signed her own name and expressly indicated that she was signing as an
agent of HCCC.

Philippine Bank of Commerce vs. Aruego


GR L-25836-37, 31 January 1981, 102 scra 530

FACTS: To facilitate payment of the printing of a periodical called World Current


Events., Aruego, its publisher, obtained a credit accommodation from the Philippine
Bank of Commerce. For every printing of the periodical, the printer collected the cost
of printing by drawing a draft against the bank, said draft being sent later to Aruego
for acceptance. As an added security for the payment of the amounts advanced to
the printer, the bank also required Aruego to execute a trust receipt in favor of the
bank wherein Aruego undertook to hold in trust for the bank the periodicals and to
sell the same with the promise to turn over to the bank the proceeds of the sale to
answer for the payment of all obligations arising from the draft. The bank instituted
an action against Aruego to recover the cost of printing of the latters
periodical. Aruego however argues that he signed the supposed bills of exchange
only as an agent of the Philippine Education Foundation Company where he is
president.

ISSUES:
Whether Aruego can be held liable by the petitioner although he signed the
supposed bills of exchange only as an agent of Philippine Education Foundation
Company.

RULING:
Aruego did not disclose in any of the drafts that he accepted that he was signing as
representative of the Philippine Education Foundation Company. For failure to
disclose his principal, Aruego is personally liable for the drafts he accepted,
pursuant to Section 20 of the NIL which provides that when a person adds to his
signature words indicating that he signs for or on behalf of a principal or in a
representative capacity, he is not liable on the instrument if he was duly authorized;
but the mere addition of words describing him as an agent or as filing a
representative character, without disclosing his principal, does not exempt him from
personal liability.

Negotiable Instruments Case Digest: Philippine Bank Of Commerce V. Jose


M. Aruego (1961)
G.R. Nos. L-25836-37 January 31, 1981

FACTS: December 1, 1959: Philippine Bank of Commerce (PBC) instituted against


Jose M. Aruego for the recovery of the total sum of about P 35K with interest from
November 17, 1959 and commission of 3/8% for every thirty 30 days plus attorney's
fees of 10% of the total amount due and costs represents the cost of the printing
the periodical published by the Aruego "World Current Events".

To facilitate the payment of the printing, Aruego obtained a credit accommodation


from the PBC the printer, Encal Press and Photo Engraving, collected the cost of
every printing by drawing a draft against the PBC, which PBC later accepts.

As an added security for the payment of the amounts advanced to Encal Press and
Photo-Engraving, PBC required Aruego to execute a trust receipt (PBC hold in trust
for Aruego the periodicals and to sell the same with the promise to turn over to the
Aruego the proceeds for the payment of all obligations arising from the draft)
trial court: Aruego to pay to the PBC

Aruego: signed the supposed bills of exchange as an agent of the Philippine


Education Foundation Company where he is president

Section 20 of the Negotiable Instruments Law

"Where the instrument contains or a person adds to his signature words indicating
that he signs for or on behalf of a principal or in a representative capacity, he is not
liable on the instrument if he was duly authorized; but the mere addition of words
describing him as an agent or as filing a representative character, without disclosing
his principal, does not exempt him from personal liability."
signed the drafts only as an accommodation party and as such, should be made
liable only after a showing that the drawer is incapable of paying

not really bills of exchange but mere pieces of evidence of indebtedness because
payments were made before acceptance

ISSUE: W/N Aruego should be personally liable

HELD: YES. CFI AFFIRMED. Nowhere has he disclosed that he was signing as a
representative of the Philippine Education Foundation Company. For failure to
disclose his principal, Aruego is personally liable for the drafts he accepted. An
accommodation party is one who has signed the instrument as maker, drawer,
indorser, without receiving value therefor 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 only an accommodation party he signed as a drawee/acceptor.

Under the Negotiable Instrument Law, a drawee is primarily liable. As long as a


commercial paper conforms with the definition of a bill of exchange, that paper is
considered a bill of exchange. The nature of acceptance is important only in the
determination of the kind of liabilities of the parties involved, but not in the
determination of whether a commercial paper is a bill of exchange or not.