Por uso a perpetuidad de nicho a. Panteón Nueva Vida

1. The ACCEPTOR by accepting ( Under Section 132 mean assent to the order of the drawer) the instrument (a) engages that he will pay it according to he tenor of his acceptance NOT the tenor of the instrument BUT if the tenor of the acceptance is GENERAL, under Sections 139 and 140, the tenor of the bill is the same as that of the acceptance. (b) admits the existence of the drawer, genuineness of the signature of the drawer, capacity and authority of the drawer to draw the instrument, and the existence and capacity to endorse of the payee. CONSEQUENTLY, he is precluded from setting up the defenses that the drawer is non-existent or fictitious, that drawer’s signature is a forgery, and want of consideration between him and the drawer

2. In case of an alteration before acceptance, the prevailing view is that he is liable only up to the original tenor of the bill prior to acceptance. The basis is Section 132.

3. The nature of the liability of the acceptor is primary. LIABILITIES OF AN INDORSER

1. An indorser is one who has placed his signature upon an instrument other than as the maker, drawer or acceptor UNLESS he clearly indicates by appropriate words his intention to be bound in some other capacity.

2. An IRREGULAR INDORSER ( one who places his signature in blank before delivery) is liable as follows: (a) in an order instrument, he is liable to the payee and to all subsequent parties (b) in a bearer instrument, or payable to order of the maker or drawer, he is liable to all parties subsequent to the maker or drawer (c) if he signs for accommodation of the payee, he is liable to all parties subsequent to the payee (Section 64)

3. A QUALIFIED INDORSER (one who endorses without recourse), warrants that: (a) That the instrument is genuine (does not guaranty payment). (b) That he had good title to it (c) That all prior parties had capacity to contract (d) That he has no knowledge of any fact which would impair the validity of the instrument or render it valueless.

NOTE: These liabilities of a qualified endorser are the same as those of a person who negotiates an instrument payable to bearer by delivery alone. But when the negotiation, is by delivery only, the warranty extends in favor of no holder other than the immediate transferee.

Illustration:

“Payable to A or bearer P500.00” (Sgd.) “B”

This is delivered physically to X, X delivers it to Y. X is liable to Y alone but X’s liability refers to the four items above mentioned. He is not liable for payment because under Sec. 18, in as much as X’s signature does not appear, he is not liable thereon.

4. A GENERAL INDORSER (one who endorses 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 had capacity to contract (d) That the instrument is at the time of his endorsement valid and subsisting. This warranty does not run in favor of holders who are parties of the illegal transaction. (Burke v. Smith, 75 Atl. 114) (e) He engages that on due presentment, the instrument shall be accepted or paid, or both, as he case may be, 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 endorser who may be compelled to pay it.

5. Where a person places his endorsement on an instrument negotiable by delivery he incurs all liabilities of an endorser. (Sec. 67)

6. ORDER IN WHICH INDORSERS ARE LIABLE – as respect one another, indorsers are liable – prima facie in the order in which they endorse; but evidence is admissible to show that as between or among themselves they have agreed otherwise. Joint-payees or joint-endorsees who indorse are deemed to endorse jointly and severally. (Sec. 68) (a) The foregoing rules does not apply to a holder in due course, to whom the indorsers are liable in any order (b) Every indorser is liable to all endorsers subsequent to him, but not those indorsers prior to him. Illustration:

Z as holder of the instrument may present payment.

If B refuses to pay, Z can ask Y to pay; Y can collect from others in the order in which they endorse.

Under Sec. 84, where the instrument is dishonored by non-payment, an immediate right of recourse to all parties secondarily liable thereon accrues to the holder. There is no need to follow the order of endorsements.

When is the order of endorsement followed? When not? 1. Before dishonor: accessory, subsidiary

2. After dishonor: (a) principal “Pay to A or order P500.00” (Sgd.) “B” [Indorsements:] _________________ “Pay to X.” (Sgd.) “A” (1) _________________ “Pay to Y.” (Sgd.) “X” (2) _________________ “Pay to Z.” (Sgd. “Y” (3)

(b) solidary

1. Before dishonor, the obligation of an endorser is only accessory. Z, the holder, must seek payment from B first. But if B refuses to pay, he dishonors the instrument.

2. After dishonor by non-payment, Sec. 84 provides that an immediate right of recourse to all parties secondarily liable thereon accrues to the holder. Hence, A, X and Y are now liable principally, Z, the holder, can choose to go after any or all of them. After dishonor, the liability of A, X and Y becomes joint and several. Z, at his option, may sue any or all of them. Sec. 68 provides that if Z goes after X alone and X pays the P500, it is the right of X to ask A and Z to reimburse, and who is liable to one another in the order in which they are endorsed.