CASE #37

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

ANG TIONG vs.
LORENZO TING, doing business under the name and style of PRUNES PRESERVED
MFG., and FELIPE ANG

FACTS:
On August 15, 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.
With Felipe Ang's signature (indorsement in blank) at the back thereof, the
instrument was received by Ang Tiong who presented it to the drawee bank for
payment but it was dishonored.
Tiong then sued Lorenzo and Felipe, then CFI of Manila rendered its decision
in favor of Tiong. 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 appellant Ang may be considered as a general indorser.
HELD:
YES. Nothing in the check in question indicates that the appellant is not a general
indorser within the purview of section 63 of the Negotiable Instruments Law which
makes a person placing his signature upon an instrument otherwise than as maker,
drawer or acceptor a general indorser, unless he clearly indicates plaintif
appropriate words his intention to be bound in some other capacity, which he did
not do.
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 plaintif
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.
Anent Felipes alternative allegation that he is exempt as an accommodation party,
the same is not tenable. Section 29 of the NIL is clear when it states that an
accommodation party is liable on the instrument to a holder for value,
notwithstanding that such holder at the time of taking the instrument knew him to
be only an accommodation party.