Liabilities of Parties Table
Liabilities of Parties Table
Liabilities of Parties Table
MAKER PRIMARILY LIABLE DRAWER SECONDARILY LIABLE 1. Liability of Accommodation Party Liability of an Agent Liability of Indorsers: ACCEPTOR PRIMARILY LIABLE
maker to pay absolutely for the Acceptor engages to pay absolutely
note according to its tenor ADMITS PAYEE’S EXISTENCE one who signed instrument as he is not liable on the Qualified Indorser and one Negotiating by o according to the tenor of its acceptance
liability is primarily and existence of the payee maker/drawer/acceptor/ indorser instrument Delivery His liability is not subject to any condition
unconditional and his capacity to indorse w/o receiving value thereof, if he was duly authorized, 1. Instrument genuine, in all The acceptor is the drawee who accepts the bill
presumed to have acted with for the purpose of lending his name to respects what it purports to be His acceptance immediately places a legal liability on him for
care and to have signed the THAT THE BILL WILL BE some other person MUST DISCLOSE HIS 2. good title the payment of the bill in favor of one who became a holder
instrument with full knowledge ACCEPTED OR PAID OR BOTH, PRINCIPAL; mere addition of 3. all prior parties had capacity to thereof after acceptance,
according to its tenor, words describing him as an contract
of its contents, unless of AP liable on the instrument to
agent does not exempt from 4. he had no knowledge of any
o and if he wants to escape liability, it is up to him to
course, if fraud is proved holder for value even if holder, at show that he is a
HE WILL PAY ONLY WHEN personal liability. fact w/c would impair validity of mere agent of the drawer,
time of taking instrument, knew he
It is dishonored instrument or render it or allege and prove any other defense
ADMITS PAYEE’S EXISTENCE, was only an AP
And the necessary proceedings of Signature per procuration valueless which he has to the liability
ETC.
dishonor are duly taken
Liability of Irregular Indorser notice that the agent has in case of negotiation by
1. admits existence of the a person not a party to an but a limited authority to
payee delivery only, WARRANTY EFFECT OF MORTGAGE EXECUTED BY ACCEPTOR
liability subject to the two conditions and attaches instrument, sign, ONLY EXTENDS IN FAVOR
2. admits payee’s then capacity Where being unable to pay certain bills of exchange
only upon their fulfillment places thereon his signature and the principal is OF IMMEDIATE
to indorse which the drawee has accepted,
in blank bound only in case the TRANSFEREE
3. precluded from setting up the the latter makes a mortgage in favor of the holder of said bills
The drawer, by merely drawing the bill before delivery, agent in so signing
following defenses: upon certain merchandise
and signing his name in the bill as such he’s liable as an indorser, acted within the Liability of a General or Unqualified
That the payee is a fictitious the value of which is sought to be collected through said bills,
drawer, without more, impliedly in accordance w/ these rules: actual limits of his Indorser
person in order to secure the payment of said amount if the
engages to be so secondarily liable, as authority 1. instrument genuine, good title,
o he admits that the merchandise is sold
if he has incorporated the provisions of 1. Instrument payable to order of capacity of prior parties
payee exists 3rd person: liable to payee and to all Where a broker or agent and the integrity thereof while the sale is not effected,
Section 61 in the bill 2. instrument is at time of
That the payee was insane, a subsequent parties negotiates an instrument THE EXECUTION OF SAID MORTGAGE DOESN’T
If the bill is not paid, accordingly, indorsement valid and
minor, or a corporation acting 2. Instrument payable to the order of without indorsement, he CONSTITUTE A NOVATION OF THE OBLIGATION
the drawer becomes liable for the subsisting
ultra vires because by maker/drawer, or payable to incurs all liabilities in Sec. REPRESENTED BY SAID ACCEPTED BILLS UNLESS IT IS
payment of its value to the holder 3. on due presentment, it shall be
making the note, bearer: liable to all parties 65, unless he discloses EXPRESSLY STATED IN THE MORTGAGE
provided that notice of dishonor is accepted or paid, or both,
o he admits the then subsequent to make/drawer name of principal and fact
given according to tenor
capacity of the payee to 3. Signs for accommodation of payee, that he’s only acting as agent 4. if it be dishonored, and ACCEPTOR TO PAY ACCORDING TO TENOR OF HIS ACCEPTANCE
indorse liable to all parties subsequent to necessary proceedings on maker to pay according to the tenor of the note,
SECONDARILY LIABLE TO payee acceptor to pay according to the tenor of his acceptance,
dishonor be duly taken, he will
MAKER MUST PAY ACCORDING 1. The holder o not of the bill he accepts
pay the amt. To holder, or to
TO THE TERMS OF THE NOTE 2. Or if any of the indorsers intervening Sadaya v Sevilla Rules: o Tenor of his acceptance may be different from the
any subsequent indorser who
maker bound himself to pay between the holder and the drawer is 1. a joint and several accommodation tenor of the bill,
may be compelled to pay it
personally. compelled to pay by the holder, the maker of a negotiable promissory o may accept the bill with qualifications
drawer, will be liable to that indorser so note may demand from the Order of Liability among Indorsers If acceptance is general,
cannot shift the obligation without compelled to pay principal debtor reimbursement for 1. among themselves: liable o tenor of then bill same tenor as of his acceptance
the consent of the payee. the amt. That he paid to the payee prima facie in the order they
DRAWER OF UNACCEPTED BILL PRIMARILY 2. a joint and several accommodation indorse, but proof of another WHERE ORIGINAL TENOR IS ALTERED BEFORE ACCEPTANCE
cannot allege that he spends the LIABLE makers who pays on the said agreement admissible Suppose the bill is originally for P1000.
money on expenses which should DRAWER PRINCIPAL DEBTOR promissory note may directly 2. but holder may sue any of the
be charged to a trust administered BEFORE ACCEPTANCE BY Before the drawee X accepts it,
demand reimbursement from his indorsers, regardless of order o it is altered by the payee B to P4000.
by a creditor because it is not the DRAWEE/ACCEPTOR, co-accommodation maker without of indorsement
payee’s concern to know how the SECONDARILY LIABLE AFTER Then X accepts it.
first directing his action vs. the 3. joint payees/indorsees deemed
proceeds should be spent. That is ACCEAPTANCE BY principal debtor provided: How much is X liable to a holder in due course?
to indorse jointly and severally
the sole concern of the maker. DRAWEE/ACCEPTOR, 1. he made the payment by According to one view,
The payee’s interest is virtue of a judicial X is liable for P4000 and not P1000.
merely to see that the demand The reason is that the tenor of X’s acceptance is for P4000.
note is paid according MAY LIMIT HIS LIABILITY 2. or the principal debtor is
to its term. by express stipulation insolvent EFFECT OF SECTION 124
By adding words such as Under the first view, what is the effect of Section 124 which
LIABILITY OF 2 OR MORE o “without recourse” or provides that a holder in due course can recover only the
MAKERS o “I shall not be liable in case original tenor of the instrument?
When 2 or more of non-payment or non- It seems that this refers to the original tenor of instrument taken
makers sign jointly or acceptance” from the standpoint of the person primarily liable, in
severally, X’s standpoint.
each of them is In other words, the original tenor of the instrument is P4000,
individually liable for which is the tenor of X’s acceptance.
the payment of the full If after his acceptance,
amount of their o a subsequent indorsee alters the bill to read
obligation P9000,
even if one of them o then X could be liable for P4000 only,
didn’t receive part of o the original tenor of his acceptance,
the value given o even as to a holder of due course.
therefor,
as he would be ADMISSION OF DRAWER’S EXISTENCE, ETC.
considered as an Drawer’s existence
accommodation party
The genuineness of the drawer’s signature
The capacity and authority of the drawer to draw the
instrument
DOESN’T ADMIT THE GENUINENESS OF THE INDORSER’S
SIGNATURES