Tiong V.

Ang
G.R. No. L-26767, February 22, 1968
Castro, J.
Facts:
Ting issued a P4,000 Philippine Bank of Communications(PBC) check payable to cash or
bearer with Ang’s signature on the back as indorsement. Tiong received said check and
presented it to PBC which dishonored it. Tiong then made written demands to Ting and Ang to
make good with said check. When defendants did not comply, a suit was filed. Both MTC and
CA ruled in favor of Tiong, thus this petition.
Issues:
1. Is the instrument negotiable?
2. Is he a general indorser?
3. Would being an accommodation party change Ang’s liability?
Ruling:
1. The genuineness and the due execution of the instrument was not controverted and appellee
is a holder for value; hence, the instrument is negotiable as the presumption of negotiability
was never overcome.
2. Yes, there is nothing in the instrument which states otherwise and according to NIL 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."
3. No, even as an accommodation party, he is still liable to the instrument according to Sec. 29
of the NIL which states that an accommodation party is 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 him to be
only an accommodation party.