b)

REVIEWER ON COMMERCIAL LAW Y

General Indorser (Sec. 66)- Every indorser who
endorses without qualification, warrants to all
subsequent holders in due course (2011 Bar):
1)
that the instrument is genuine and in all
respects what it purports to be;
2)
that he has a good title to it;
3)
that all prior parties had capacity to contract,
4)
that the instrument is, at the time of the
endorsement, valid and subsisting.
Notes: (1) The general indorser is second.
arily liable because he also engages that on due
presentment, it shall be accepted or paid, or both,
as the case may be, according to its tenor; and 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 (1986
Bar);
(2)
The secondarily liability is not depen-
dent on the capability or ability of the drawee to
pay; there is liability so long as there is dishonor
(1986 Bar);
(3)
A general indorser of an instrument
that is originally payable to bearer is liable to
those who make title through his or her indorse-
ment (Sec. 40, NIL; 1979 and 1988 Bar).
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14.03.
EXAMPLES:
(1)
(2)
A general indorser who is being made secondarily liable cannot
use as a defense the fact that the promissory note was issued in
payment for shabu because the general indorser warrants under
Section 66 that the note is valid and subsisting (2001 Bar);
A general indorser cannot likewise use as a defense the fact that the
amount was altered by a prior party like the original payee from
P1 Million to P12 Million because a general indorser warrants
under Section 66 that the instrument is genuine and in all respect
what it purports to be (2011 Bar);