Sadaya vs.

Sevilla
a solidary accommodation makerwho made paymenthas the right to contribution,
from his co-accomodation maker, in the absence of agreement to the contrary between them,
subject to conditions imposed by law. A Solidary accommodation maker (1) may demand
from the principal debtor reimbursement of the amount he paid to the payee; (2) he may
demand contribution from his co-accommodation maker, without first directing his action to
or against principal debtor provided that (a) he made the payment by virtue of judicial
demand; (b) the principal debtor is insolvent.
Where a co-accommodation maker paid voluntarily the outstanding balance of the account of
the principal debtor without previous judicial demand and when the principal debtor is not
insolvent, he cannot, demand from his co-accommodation maker of the share which is
proportionately owing to him.
Crisologo-Jose vs. Court of Appeals
The provision of NIL which holds an accommodation party liable on the instrument to holder
for value, although such holder at the time of taking the instrument knew him to be only an
accommodation party, does not include nor apply to corporations which are accommodation
parties. This is because the issue or indorsement of negotiable paper by a corporation without
consideration and for accommodation of another is ultra vires. Hence, one who has taken the
instrument with knowledge of the accommodation nature thereof cannot recover against a
corporation where it is only a accommodation party.
Stelco Marketing vs. Court of Appeals
A person cannot be holder of the check for value if it does not meet the essential requisites
prescribed by the law. He must become the holder of it before it was overdue, and without
notice that it had previously dishonored, and he took the check in good faith and for value
before he can be considered as a holder of the check for value.
Travel-On vs. Court of Appeals
Check which is regular on its face is deemed prima facie to have been issued for a valuable
consideration and every person whose signature appears thereon is deemed to have become a
party thereto for value. Further the rule is quite settled that a negotiable instrument is
presumed to have been given or indorsed for a sufficient consideration unless otherwise
contradicted and overcome by another evidence.
In the accommodation transactions recognized by the NIL, an accommodating party
lends his credit to the accommodated party, by issuing or indorsing a check which is held by
the payee or indorsee as a holder in due course, who gave full value which the accommodated
party must repay the accommodating party, unless of course the accommodating party
intended to make a donation to the accommodated party. But the accommodating party is
bound on the check to the holder in due course who is necessarily a third party and is not the
accommodated party. Having issued or indorsed the check, the accommodating party has
warranted to the holder in due course that he will pay the same according to its tenor.
BPI v. CA
Ordinarily private respondent may be held liable as a general indorser of the check or even
as an accommodation party. However, petitioner BPI, in allowing the withdrawal of private
respondents deposit, failed to exercise the diligence of a good father of a family. BPI
violated its own rules by allowing the withdrawal of an amount that is definitely over and

above the aggregate amount of private respondents dollar deposits that had yet to be
cleared. The proximate cause of the eventual loss of the amount of $2,500.00 on BPI's part
was its personnels negligence in allowing such withdrawal in disregard of its own rules and
the clearing requirement in the banking system. In so doing, BPI assumed the risk of
incurring a loss on account of a forged or counterfeit foreign check and hence, it should
suffer the resulting damage.
*exception to the general rule that indorsers are secondarily liable if there was gross
negligence by the bank, the indorser will not be held liable

Agro Conglomerates v. Ca
Subsidiary contract of suretyship had taken effect since petitioner signed the
promissory note as maker and accommodation party. Petitioner became liable as
an accommodation party. He has the right, after paying the holder, to obtain
reimbursement from the party accommodated.
De Ocampo vs. Gatchalian
Good faith on the part of the holder is presumed, such presumption is destroyed if the payee
or indorsee acquired possession of the instrument under circumstances that should have put it
to inquiry as to the title of the holder who negotiated the instrument. The burden is now on
the part of the holder to show that notwithstanding the suspicious circumstances, it acquired
in the actual good faith.
Mesina vs. IAC
The holder of a cashiers check who is not a holder in due course cannot enforce
payment against the issuing bank which dishonors the same. If a payee of a cashiers
check obtained it from the issuing bank by fraud, or if there is some other reason why
the payee is not entitled to collect the check, the bank would of course have the
right to refuse payment of the check when presented by payee.
Metropol vs. Sambok
A qualified indorserment constitutes the indorser a mere assignor of the title to the
instrument. It may be made by adding to the indorsers signature the words without
recourse or any words of similar import. Such indorsement relieves the indorser of the
general obligation to pay if the instrument is dishonored but not of the liability arising from
warranties on the instrument as provided by section 65 of NIL.
Recourse means resort to a person who is secondarily liable after the default of the person
who is primarily liable. A person who indorses without qualification engages that on due
presentment, the note shall be accepted or paid, or both as the case maybe, and that if it be
dishonored, he will pay the amount thereof to the holder.
Maralit v. Imperial
Accused was held liable for the altered treasury waarants, who upon indorsement
warrants that the instrument is genuine in all respects what it purports to be be and
that she will pay the amount thereof in case of dishonour.
Sapiera vs. Court of Appeals
Signing at the back of the instrument without any indication as to how she/he should be
bound thereby and, therefore, she is deemed to be an indorser thereof.
Prudential Bank vs. IAC

There was no need for acceptance as the issued drafts were sight drafts. Presentment for
acceptance is necessary only in cases provided in sec. 143 of NIL
Wong vs. Court of Appeals
A check must be presented for payment within a reasonable time after its issue or the drawer
will be discharged from liability thereon to the extent of the loss caused by the delay. By
current banking practice, a check becomes stale after more than six (6) months, or 180 days.
The International Corporate Bank vs. Francis S. Gueco and Ma. Luz E Gueco
A managers check does not become stale bec. The one who draws the check is the manager
of the bank. It is a special kind of check which is accepted in advance, funds are already
separated from the account of the drawer and then reserved to the payee that is why it does
not become stale.
Nyco sales v. BA finance
Nyco is still liable to pay BA finance despite Nycos pretension that it had not been notified
of the fact of dishonour. The dishonour of an assigned check simply stresses its liability and
the failure to give a notice of dishonour will not discharge it from such liability because the
cause of action stems from the breach of the warranties and not from the dishonouring of the
check alone.
PNB v. CA
Material alteration is defined to be any change in the instrument which affects or changes the
liablitiy of the parties in any way as specified in sec. 125 or changes the contract of the
parties in any respect. A change in the serial number of a check is not a material alteration as
it did not alter the liablity of the parties and such alteration was not included in Sec. 125
Montinola v. PNB
The addition of words Agent, Phil. National Bank was made after the check had
been transferred. Such insertion converts the bank from a mere drawee to a
drawer and therefore changes its liability, constitutes a material alteration of the
instrument without the consent of the parties liable thereon, and so discharges the
instrument.
State Investment House Inc. vs. CA
The Post-dated checks were merely issued as security is not a ground for the discharge of the
instruments as against a holder in due course. For the only grounds are those outlined in Sec.
119 of the NIL.
Bataan Cigar and Cigarette Factory, Inc. vs. CA
In order to preserve the credit worthiness of checks, jurisprudence has pronounced that
crossing a check should have the following effects: (1) check may not be encashed but only
deposited in the bank; (2) the check may be negotiated only once, to one who has an account
with a bank; (3) and the act of crossing the check serves as a warning to the holder that the
check has been issued for a definite purpose so that he must inquire if he has received the
check pursuant to that purpose, otherwise he is not a holder in due course.
Citytrust banking Corp., vs. Intermediate Appellate Court

Even there was error on the account number the controlling in determining in whose account
the deposit is name of the account owner. This is so because it is not likely to commit an error
in ones name than merely relying on numbers which are difficult to remember. Numbers are
for the convenience of the bank but was never intended to disregard the real name of its
depositors. The bank is engaged in business impressed with public trust, and it is its duty to
protect in return its clients and depositors who transact business with it.
Tan vs. Court of Appeals
A cashiers check is a primary obligation of the issuing bank and accepted in advance by its
mere issuance, and by its peculiar character and general use in the commercial world is
regarded substantially to be as good as the money which it represents.
Papa vs. A.U. Valencia
After more than 10 years from the payment in part by cash and in part by check, the
presumption is that the check had been encashed. Failure of the payee to encash a check for
more than 10 years undoubtedly resulted in the impairment of the check through his
unreasonable and unexplained delay.
Pio Barretto Realty v. CA
While delivery of a check produces the effect of payment only when it is encashed, the rule is
otherwise if the debtor was prejudiced by the creditors unreasonable delay in presentment.
Acceptance of a check implies an undertaking of due diligence in presenting it for payment.
If no such presentment was made, the drawer cannot be held liable irrespective of loss or
injury sustained by the payee. Payment will be deemed effected and the obligation for which
the check was given as conditional payment will be discharged.