G.R. No. 93073 December 21, 1992 REPUBLIC PLANTERS BANK, petitioner, vs.

COURT OF APPEALS and FERMIN CANLAS, respondents. DECISION CAMPOS, JR., J.: This is an appeal by way of a Petition for Review on Certiorari from the decision * of the Court of Appeals in CA G.R. CV No. 07302, entitled Republic Planters Bank. Plaintiff -Appellee vs. Pinch Manufacturing Corporation, et al., Defendants, and Fermin Canlas, Defendant-Appellant, which affirmed the decision ** in Civil Case No. 825448 except that it completely absolved Fermin Canlas from liability under the promissory notes and reduced the award for damages and attorneys fees. The RTC decision, rendered on June 20, 1985, is quoted hereunder: WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff Republic Planters Bank, ordering defendant Pinch Manufacturing Corporation (formerly Worldwide Garment Manufacturing, Inc.) and defendants Shozo Yamaguchi and Fermin Canlas to pay, jointly and severally, the plaintiff bank the following sums with interest thereon at 16% per annum from the dates indicated, to wit: Under the promissory note (Exhibit A), the sum of P300,000.00 with interest from January 29, 1981 until fully paid; under promissory note (Exhibit B), the sum of P40,000.00 with interest from November 27, 1980; under the promissory note (Exhibit C), the sum of P166,466.00 which interest from January 29, 1981; under the promissory note (Exhibit E), the sum of P86,130.31 with interest from January 29, 19 81; under the promissory note (Exhibit G), the sum of P12,703.70 with interest from November 27, 1980; under the promissory note (Exhibit H), the sum of P281,875.91 with interest from January 29, 1981; and under the promissory note (Exhibit I), the sum of P200,000.00 with interest from January 29, 1981. Under the promissory note (Exhibit D) defendants Pinch Manufacturing Corporation (formerly named Worldwide Garment Manufacturing, Inc.), and Shozo Yamaguchi are ordered to pay jointly and severally, the plaintiff bank the sum of P367,000.00 with interest of 16% per annum from January 29, 1980 until fully paid Under the promissory note (Exhibit F) defendant corporation Pinch (formerly Worldwide) is ordered to pay the plaintiff bank the sum of P140,000.00 with interest at 16% per annum from November 27, 1980 until fully paid. Defendant Pinch (formerly Worldwide) is hereby ordered to pay the plaintiff the sum of P231,120.81 with interest at 12% per annum from July 1, 1981, until fully paid and the sum of P331,870.97 with interest from March 28, 1981, until fully paid. All the defendants are also ordered to pay, jointly and severally, the plaintiff the sum of P100,000.00 as and for reasonable attorneys fee and the further sum equivalent to 3% per annum of the respective principal sums from the dates above stated as penalty charge until fully paid, plus one percent (1%) of the principal sums as service charge. With costs against the defendants. SO ORDERED. 1 From the above decision only defendant Fermin Canlas appealed to the then Intermediate Court (now the Court Appeals). His contention was that inasmuch as he signed the promissory notes in his capacity as officer of the defunct Worldwide Garment Manufacturing, Inc, he should not be held personally liable for such authorized corporate acts that he performed. It is now the contention of the petitioner Republic Planters Bank that having unconditionally signed the nine (9) promissory notes with Shozo Yamaguchi, jointly and severally, defendant Fermin Canlas is solidarity liable with Shozo Yamaguchi on each of the nine notes. We find merit in this appeal. From the records, these facts are established: Defendant Shozo Yamaguchi and private respondent Fermin Canlas were President/Chief Operating Officer and Treasurer respectively, of Worldwide Garment Manufacturing, Inc.. By virtue of Board Resolution No. 1 dated August 1, 1979, defendant Shozo Yamaguchi and private respondent Fermin Canlas were authorized to apply for credit facilities with the petitioner

Republic Planters Bank in the forms of export advances and letters of credit/trust receipts accommodations. Petitioner bank issued nine promissory notes, marked as Exhibits A to I inclusive, each of which were uniformly worded in the following manner: ___________, after date, for value received, I/we, jointly and severally promise to pay to the ORDER of the REPUBLIC PLANTERS BANK, at its office in Manila, Philippines, the sum of ___________ PESOS(.) Philippine Currency On the right bottom margin of the promissory notes appeared the signatures of Shozo Yamaguchi and Fermin Canlas above their printed names with the phrase and (in) his personal capacity typewritten below. At the bottom of the promissory notes appeared: Please credit proceeds of this note to: ________ Savings Account ______XX Current Account No. 1372-00257-6 of WORLDWIDE GARMENT MFG. CORP. These entries were separated from the text of the notes with a bold line which ran horizontally across the pages. In the promissory notes marked as Exhibits C, D and F, the name Worldwide Garment Manufacturing, Inc. was apparently rubber stamped above the signatures of defendant and private respondent. On December 20, 1982, Worldwide Garment Manufacturing, Inc. noted to change its corporate name to Pinch Manufacturing Corporation. On February 5, 1982, petitioner bank filed a complaint for the recovery of sums of money covered among others, by the nine promissory notes with interest thereon, plus attorneys fees and penalty charges. The complainant was originally brought against Worldwide Garment Manufacturing, Inc. inter alia, but it was later amended to drop Worldwide Manufacturing, Inc. as defendant and substitute Pinch Manufacturing Corporation it its place. Defendants Pinch Manufacturing Corporation and Shozo Yamaguchi did not file an Amended Answer and failed to appear at the scheduled pre-trial conference despite due notice. Only private respondent Fermin Canlas filed an Amended Answer wherein he, denied having issued the promissory notes in question since according to him, he was not an officer of Pinch Manufacturing Corporation, but instead of Worldwide Garment Manufacturing, Inc., and that when he issued said promissory notes in behalf of Worldwide Garment Manufacturing, Inc., the same were in blank, the typewritten entries not appearing therein prior to the time he affixed his signature. In the mind of this Court, the only issue material to the resolution of this appeal is whether private respondent Fermin Canlas is solidarily liable with the other defendants, namely Pinch Manufacturing Corporation and Shozo Yamaguchi, on the nine promissory notes. We hold that private respondent Fermin Canlas is solidarily liable on each of the promissory notes bearing his signature for the following reasons: The promissory notes are negotiable instruments and must be governed by the Negotiable Instruments Law. 2 Under the Negotiable lnstruments Law, persons who write their names on the face of promissory notes are makers and are liable as such. 3 By signing the notes, the maker promises to pay to the order of the payee or any holder 4 according to the tenor thereof. 5 Based on the above provisions of law, there is no denying that private respondent Fermin Canlas is one of the co-makers of the promissory notes. As such, he cannot escape liability arising therefrom. Where an instrument containing the words I promise to pay is signed by two or more persons, they are deemed to be jointly and severally liable thereon. 6 An instrument which begins with I ,We , or Either of us promise to, pay, when signed by two or more persons, makes them solidarily liable. 7 The fact that the singular pronoun is used indicates that the promise is individual as to each other; meaning that each of the cosigners is deemed to have made an independent singular promise to pay the notes in full. In the case at bar, the solidary liability of private respondent Fermin Canlas is made clearer and certain, without reason for ambiguity, by the presence of the phrase joint and several as describing the unconditional promise to pay to the order of Republic Planters Bank. A joint and several note is one in which the makers bind themselves both jointly and individually to the payee so that all may be sued together for its

enforcement, or the creditor may select one or more as the object of the suit. 8 A joint and several obligation in common law corresponds to a civil law solidary obligation; that is, one of several debtors bound in such wise that each is liable for the entire amount, and not merely for his proportionate share. 9 By making a joint and several promise to pay to the order of Republic Planters Bank, private respondent Fermin Canlas assumed the solidary liability of a debtor and the payee may choose to enforce the notes against him alone or jointly with Yamaguchi and Pinch Manufacturing Corporation as solidary debtors. As to whether the interpolation of the phrase and (in) his personal capacity below the signatures of the makers in the notes will affect the liability of the makers, We do not find it necessary to resolve and decide, because it is immaterial and will not affect to the liability of private respondent Fermin Canlas as a joint and several debtor of the notes. With or without the presence of said phrase, private respondent Fermin Canlas is primarily liable as a co-maker of each of the notes and his liability is that of a solidary debtor. Finally, the respondent Court made a grave error in holding that an amendment in a corporations Articles of Incorporation effecting a change of corporate name, in this case from Worldwide Garment Manufacturing, Inc. to Pinch Manufacturing Corporation extinguished the personality of the original corporation. The corporation, upon such change in its name, is in no sense a new corporation, nor the successor of the original corporation. It is the same corporation with a different name, and its character is in no respect changed. 10 A change in the corporate name does not make a new corporation, and whether effected by special act or under a general law, has no affect on the identity of the corporation, or on its property, rights, or liabilities. 11 The corporation continues, as before, responsible in its new name for all debts or other liabilities which it had previously contracted or incurred. 12 As a general rule, officers or directors under the old corporate name bear no personal liability for acts done or contracts entered into by officers of the corporation, if duly authorized. Inasmuch as such officers acted in their capacity as agent of the old corporation and the change of name meant only the continuation of the old juridical entity, the corporation bearing the same name is still bound by the acts of its agents if authorized by the Board. Under the Negotiable Instruments Law, the liability of a person signing as an agent is specifically provided for as follows: Sec. 20. Liability of a person signing as agent and so forth. Where the instrument contains or a person adds to his signature words indicating that he signs for or on behalf of a principal , or in a representative capacity, he is not liable on the instrument if he was duly authorized; but the mere addition of words describing him as an agent, or as filling a representative character, without disclosing his principal, does not exempt him from personal liability. Where the agent signs his name but nowhere in the instrument has he disclosed the fact that he is acting in a representative capacity or the name of the third party for whom he might have acted as agent, the agent is personally liable to take holder of the instrument and cannot be permitted to prove that he was merely acting as agent of another and parol or extrinsic evidence is not admissible to avoid the agents personal liabil ity. 13 On the private respondents contention that the promissory notes were delivered to him in blank for his signature, we rule otherwise. A careful examination of the notes in question shows that they are the stereotype printed form of promissory notes generally used by commercial banking institutions to be signed by their clients in obtaining loans. Such printed notes are incomplete because there are blank spaces to be filled up on material particulars such as payees name, amount of the loan, rate of interest, date of issue and the maturity date. The terms and conditions of the loan are printed on the note for the borrower-debtor s perusal. An incomplete instrument which has been delivered to the borrower for his signature is governed by Section 14 of the Negotiable Instruments Law which provides, in so far as relevant to this case, thus: Sec. 14. Blanks: when may be filled. Where the instrument is wanting in any material particular, the person in possession thereof has a prima facie authority to complete it by filling up the blanks therein. In order, however, that any such instrument when completed may be enforced against any person who became a party thereto prior to its completion, it must be filled up strictly in accordance with the authority given and within a reasonable time

Proof that the notes were signed in blank was only the self-serving testimony of private respondent Fermin Canlas, as determined by the trial court, so that the trial court doubts the defendant (Canlas) signed in blank the promissory notes. We chose to believe the banks testimony that the notes were filled up before they were given to private respondent Fermin Canlas and defendant Shozo Yamaguchi for their signatures as joint and several promissors. For signing the notes above their typewritten names, they bound themselves as unconditional makers. We take judicial notice of the customary procedure of commercial banks of requiring their clientele to sign promissory notes prepared by the banks in printed form with blank spaces already filled up as per agreed terms of the loan, leaving the borrowers-debtors to do nothing but read the terms and conditions therein printed and to sign as makers or co-makers. When the notes were given to private respondent Fermin Canlas for his signature, the notes were complete in the sense that the spaces for the material particular had been filled up by the bank as per agreement. The notes were not incomplete instruments; neither were they given to private respondent Fermin Canlas in blank as he claims. Thus, Section 14 of the Negotiable Instruments Law is not applicable. The ruling in case of Reformina vs. Tomol relied upon by the appellate court in reducing the interest rate on the promissory notes from 16% to 12% per annum does not squarely apply to the instant petition. In the abovecited case, the rate of 12% was applied to forebearances of money, goods or credit and court judgments thereon, only in the absence of any stipulation between the parties. In the case at bar however , it was found by the trial court that the rate of interest is 9% per annum, which interest rate the plaintiff may at any time without notice, raise within the limits allowed law. And so, as of February 16, 1984 , the plaintiff had fixed the interest at 16% per annum. This Court has held that the rates under the Usury Law, as amended by Presidential Decree No. 116, are applicable only to interests by way of compensation for the use or forebearance of money. Article 2209 of the Civil Code, on the other hand, governs interests by way of damages. 15 This fine distinction was not taken into consideration by the appellate court, which instead made a general statement that the interest rate be at 12% per annum. Inasmuch as this Court had declared that increases in interest rates are not subject to any ceiling prescribed by the Usury Law, the appellate court erred in limiting the interest rates at 12% per annum. Central Bank Circular No. 905, Series of 1982 removed the Usury Law ceiling on interest rates. 16 In the light of the foregoing analysis and under the plain language of the statute and jurisprudence on the matter, the decision of the respondent: Court of Appeals absolving private respondent Fermin Canlas is REVERSED and SET ASIDE. Judgment is hereby rendered declaring private respondent Fermin Canlas jointly and severally liable on all the nine promissory notes with the following sums and at 16% interest per annum from the dates indicated, to wit: Under the promissory note marked as exhibit A, the sum of P300,000.00 with interest from January 29, 1981 until fully paid; under promissory note marked as Exhibit B, the sum of P40,000.00 with interest from November 27, 1980: under the promissory note denominated as Exhibit C, the amount of P166,466.00 with interest from January 29, 1981; under the promissory note denominated as Exhibit D, the amount of P367,000.00 with interest from January 29, 1981 until fully paid; under the promissory note marked as Exhibit E, the amount of P86,130.31 with interest from January 29, 1981; under the promissory note marked as Exhibit F, the sum of P140,000.00 with interest from November 27, 1980 until fully paid; under the promissory note marked as Exhibit G, the amount of P12,703.70 with interest from November 27, 1980; the promissory note marked as Exhibit H, the sum of P281,875.91 with interest from January 29, 1981; and the promissory note marked as Exhibit I, the sum of P200,000.00 with interest on January 29, 1981. The liabilities of defendants Pinch Manufacturing Corporation (formerly Worldwide Garment Manufacturing, Inc.) and Shozo Yamaguchi, for not having appealed from the decision of the trial court, shall be adjudged in accordance with the judgment rendered by the Court a quo. With respect to attorneys fees, and penalty and service charges, the private respondent Fermin Canlas is hereby held jointly and solidarity liable with defendants for the amounts found, by the Court a quo. With costs against private respondent.

SO ORDERED. Narvasa, C.J., (Chairman), Feliciano, Regalado and Nocon, JJ., concur. G.R. No. 107898 December 19, 1995 MANUEL LIM and ROSITA LIM, petitioners, vs. COURT OF APPEALS and PEOPLE OF THE PHILIPPINES, respondents. BELLOSILLO, J.: MANUEL LIM and ROSITA LIM, spouses, were charged before the Regional Trial Court of Malabon with estafa on three (3) counts under Art. 315, par. 2 (d), of The Revised Penal Code, docketed as Crim. Cases Nos. 1696MN to 1698-MN. The Informations substantially alleged that Manuel and Rosita, conspiring together, purchased goods from Linton Commercial Company, Inc. (LINTON), and with deceit issued seven Consolidated Bank and Trust Company (SOLIDBANK) checks simultaneously with the delivery as payment therefor. When presented to the drawee bank for payment the checks were dishonored as payment on the checks had been stopped and/or for insufficiency of funds to cover the amounts. Despite repeated notice and demand the Lim spouses failed and refused to pay the checks or the value of the goods. On the basis of the same checks, Manuel and Rosita Lim were also charged with seven (7) counts of violation of B.P. Blg. 22, otherwise known as the Bouncing Checks Law, docketed as Crim. Cases Nos. 1699-MN to 1705MN. In substance, the Informations alleged that the Lims issued the checks with knowledge that they did not have sufficient funds or credit with the drawee bank for payment in full of such checks upon presentment. When presented for payment within ninety (90) days from date thereof the checks were dishonored by the drawee bank for insufficiency of funds. Despite receipt of notices of such dishonor the Lims failed to pay the amounts of the checks or to make arrangements for full payment within five (5) banking days. Manuel Lim and Rosita Lim are the president and treasurer, respectively, of Rigi Bilt Industries, Inc. (RIGI). RIGI had been transacting business with LINTON for years, the latter supplying the former with steel plates, steel bars, flat bars and purlin sticks which it uses in the fabrication, installation and building of steel structures. As officers of RIGI the Lim spouses were allowed 30, 60 and sometimes even up to 90 days credit. On 27 May 1983 the Lims ordered 100 pieces of mild steel plates worth P51,815.00 from LINTON which were delivered on the same day at their place of business at 666 7th Avenue, 8th Street, Kalookan City. To pay LINTON for the delivery the Lims issued SOLIDBANK Check No. 027700 postdated 3 September 1983 in the amount of P51,800.00. 1 On 30 May 1983 the Lims ordered another 65 pieces of mild steel plates worth P63,455.00 from LINTON which were delivered at their place of business on the same day. They issued as payment SOLIDBANK Check No. 027699 in the amount of P63,455.00 postdated 20 August 1983. 2 The Lim spouses also ordered 2,600 "Z" purlins worth P241,800.00 which were delivered to them on various dates, to wit: 15 and 22 April 1983; 11, 14, 20, 23, 25, 28 and 30 May 1983; and, 2 and 9 June 1983. To pay for the deliveries, they issued seven SOLIDBANK checks, five of which were Check No. Date of Issue Amount 027683 16 July 1983 P27,900.00 3 027684 23 July 1983 P27,900.00 4 027719 6 Aug. 1983 P32,550.00 5 027720 13 Aug. 1983 P27,900.00 6 027721 27 Aug. 1983 P37,200.00 7 William Yu Bin, Vice President and Sales Manager of LINTON, testified that when those seven (7) checks were deposited with the Rizal Commercial Banking Corporation they were dishonored for "insufficiency of funds" with the additional notation "payment stopped" stamped thereon. Despite demand Manuel and Rosita refused to make good the checks or pay the value of the deliveries. Salvador Alfonso, signature verifier of SOLIDBANK, Grace Park Branch, Kalookan City, where the Lim spouses maintained an account, testified on the following transactions with respect to the seven (7) checks:

CHECK NO. DATE PRESENTED REASON FOR DISHONOR 027683 22 July 1983 Payment Stopped (PS) 8 027684 23 July 1983 PS and Drawn Against Insufficient Fund (DAIF) 9 027699 24 Aug. 1983 PS and DAIF 10 027700 5 Sept. 1983 PS and DAIF 11 027719 9 Aug. 1983 DAIF 12 027720 16 Aug. 1983 PS and DAIF 13 027721 30 Aug. 1983 PS and DAIF 14 Manuel Lim admitted having issued the seven (7) checks in question to pay for deliveries made by LINTON but denied that his company's account had insufficient funds to cover the amounts of the checks. He presented the bank ledger showing a balance of P65,752.75. Also, he claimed that he ordered SOLIDBANK to stop payment because the supplies delivered by LINTON were not in accordance with the specifications in the purchase orders. Rosita Lim was not presented to testify because her statements would only be corroborative. On the basis of the evidence thus presented the trial court held both accused guilty of estafa and violation of B.P. Blg. 22 in its decision dated 25 January 1989. In Crim. Case No. 1696-MN they were sentenced to an indeterminate penalty of six (6) years and one (1) day of prision mayor as minimum to twelve (12) years and one (1) day of reclusion temporal as maximum plus one (1) year for each additional P10,000.00 with all the accessory penalties provided for by law, and to pay the costs. They were also ordered to indemnify LINTON in the amount of P241,800.00. Similarly sentences were imposed in Crim. Cases Nos. 1697-MN and 1698-MN except as to the indemnities awarded, which were P63,455.00 and P51,800.00, respectively. In Crim. Case No. 1699-MN the trial court sentenced both accused to a straight penalty of one (1) year imprisonment with all the accessory penalties provided for by law and to pay the costs. In addition, they were ordered to indemnify LINTON in the amount of P27,900.00. Again, similar sentences were imposed in Crim. Cases Nos. 1700-MN to 1705-MN except for the indemnities awarded, which were P32,550.00, P27,900.00, P27,900.00, P63,455.00, P51,800.00 and P37,200.00 respectively. 15 On appeal, the accused assailed the decision as they imputed error to the trial court as follows: (a) the regional Trial Court of malabon had no jurisdiction over the cases because the offenses charged ere committed outside its territory; (b) they could not be held liable for estafa because the seven (7) checks were issued by them several weeks after the deliveries of the goods; and, (c) neither could they be held liable for violating B.P. Blg. 22 as they ordered payment of the checks to be stopped because the goods delivered were not those specified by them, besides they had sufficient funds to pay the checks. In the decision of 18 September 1992 16 respondent Court of Appeals acquitted accused-appellants of estafa on the ground that indeed the checks were not made in payment of an obligation contracted at the time of their issuance. However it affirmed the finding of the trial court that they were guilty of having violated B.P. Blg. 22. 17On 6 November 1992 their motion for reconsideration was denied. 18 In the case at bench petitioners maintain that the prosecution failed to prove that any of the essential elements of the crime punishable under B.P. Blg. 22 was committed within the jurisdiction of the Regional Trial Court of Malabon. They claim that what was proved was that all the elements of the offense were committed in Kalookan City. The checks were issued at their place of business, received by a collector of LINTON, and dishonored by the drawee bank, all in Kalookan City. Furthermore, no evidence whatsoever supports the proposition that they knew that their checks were insufficiently funded. In fact, some of the checks were funded at the time of presentment but dishonored nonetheless upon their instruction to the bank to stop payment. In fine, considering that the checks were all issued, delivered, and dishonored in Kalookan City, the trial court of Malabon exceeded its jurisdiction when it tried the case and rendered judgment thereon. The petition has no merit. Section 1, par. 1, of B.P. Blg. 22 punishes "[a]ny person who makes or draws and issues any check to apply on account or for value, knowing at the time of issue that he does not have sufficient

funds in or credit with the drawee bank for the payment of such check in full upon its presentment, which check is subsequently dishonored by the drawee bank for insufficiency of funds or credit or would have been dishonored for the same reason had not the drawer, without any valid reason, ordered the bank to stop payment . . ." The gravamen of the offense is knowingly issuing a worthless check. 19 Thus, a fundamental element is knowledge on the part of the drawer of the insufficiency of his funds in 20 or credit with the drawee bank for the payment of such check in full upon presentment. Another essential element is subsequent dishonor of the check by the drawee bank for insufficiency of funds or credit or would have been dishonored for the same reason had not the drawer, without any valid reason, ordered the bank to stop payment. 21 It is settled that venue in criminal cases is a vital ingredient of jurisdiction. 22 Section 14, par. (a), Rule 110, of the Revised Rules of Court, which has been carried over in Sec. 15, par. (a), Rule 110 of the 1985 Rules on Criminal Procedure, specifically provides: Sec. 14. Place where action is to be instituted. (a) In all criminal prosecutions the action shall be instituted and tried in the court of the municipality or province wherein the offense was committed or anyone of the essential ingredients thereof took place. If all the acts material and essential to the crime and requisite of its consummation occurred in one municipality or territory, the court therein has the sole jurisdiction to try the case. 23 There are certain crimes in which some acts material and essential to the crimes and requisite to their consummation occur in one municipality or territory and some in another, in which event, the court of either has jurisdiction to try the cases, it being understood that the first court taking cognizance of the case excludes the other. 24 These are the so-called transitory or continuing crimes under which violation of B.P. Blg. 22 is categorized. In other words, a person charged with a transitory crime may be validly tried in any municipality or territory where the offense was in part committed. 25 In determining proper venue in these cases, the following acts material and essential to each crime and requisite to its consummation must be considered: (a) the seven (7) checks were issued to LINTON at its place of business in Balut, Navotas; b) they were delivered to LINTON at the same place; (c) they were dishonored in Kalookan City; and, (d) petitioners had knowledge of the insufficiency of their funds in SOLIDBANK at the time the checks were issued. Since there is no dispute that the checks were dishonored in Kalookan City, it is no longer necessary to discuss where the checks were dishonored. Under Sec. 191 of the Negotiable Instruments Law the term "issue" means the first delivery of the instrument complete in form to a person who takes it as a holder. On the other hand, the term "holder" refers to the payee or indorsee of a bill or note who is in possession of it or the bearer thereof. In People v. Yabut 26 this Court explained . . . The place where the bills were written, signed, or dated does not necessarily fix or determine the place where they were executed. What is of decisive importance is the delivery thereof. The delivery of the instrument is the final act essential to its consummation as an obligation. An undelivered bill or note is inoperative. Until delivery, the contract is revocable. And the issuance as well as the delivery of the check must be to a person who takes it as a holder, which means "(t)he payee or indorsee of a bill or note, who is in possession of it, or the bearer thereof." Delivery of the check signifies transfer of possession, whether actual or constructive, from one person to another with intent to transfer titlethereto . . . Although LINTON sent a collector who received the checks from petitioners at their place of business in Kalookan City, they were actually issued and delivered to LINTON at its place of business in Balut, Navotas. The receipt of the checks by the collector of LINTON is not the issuance and delivery to the payee in contemplation of law. The collector was not the person who could take the checks as a holder, i.e., as a payee or indorsee thereof, with the intent to transfer title thereto. Neither could the collector be deemed an agent of LINTON with respect to the checks because he was a mere employee. As this Court further explained in People v. Yabut 27

Modesto Yambao's receipt of the bad checks from Cecilia Que Yabut or Geminiano Yabut, Jr., in Caloocan City cannot, contrary to the holding of the respondent Judges, be licitly taken as delivery of the checks to the complainant Alicia P. Andan at Caloocan City to fix the venue there. He did not take delivery of the checks as holder, i.e., as "payee" or "indorsee." And there appears to be no contract of agency between Yambao and Andan so as to bind the latter for the acts of the former. Alicia P. Andan declared in that sworn testimony before the investigating fiscal that Yambao is but her "messenger" or "part-time employee." There was no special fiduciary relationship that permeated their dealings. For a contract of agency to exist, the consent of both parties is essential. The principal consents that the other party, the agent, shall act on his behalf, and the agent consents so as to act. It must exist as a fact. The law makes no presumption thereof. The person alleging it has the burden of proof to show, not only the fact of its existence, but also its nature and extent . . . Section 2 of B.P. Blg. 22 establishes a prima facie evidence of knowledge of insufficient funds as follows The making, drawing and issuance of a check payment of which is refused by the bank because of insufficient funds in or credit with such bank, when presented within ninety (90) days from the date of the check, shall be prima facie evidence of knowledge of such insufficiency of funds or credit unless such maker or drawer pays the holder thereof the amount due thereon, or makes arrangement for payment in full by the drawee of such check within five (5) banking days after receiving notice that such check has not been paid by the drawee. The prima facie evidence has not been overcome by petitioners in the cases before us because they did not pay LINTON the amounts due on the checks; neither did they make arrangements for payment in full by the drawee bank within five (5) banking days after receiving notices that the checks had not been paid by the drawee bank. InPeople v. Grospe 28 citing People v. Manzanilla 29 we held that ". . . knowledge on the part of the maker or drawer of the check of the insufficiency of his funds is by itself a continuing eventuality, whether the accused be within one territory or another." Consequently, venue or jurisdiction lies either in the Regional Trial Court of Kalookan City or Malabon. Moreover, we ruled in the same Grospe and Manzanilla cases as reiterated in Lim v. Rodrigo 30 that venue or jurisdiction is determined by the allegations in the Information. The Informations in the cases under consideration allege that the offenses were committed in the Municipality of Navotas which is controlling and sufficient to vest jurisdiction upon the Regional Trial Court of Malabon. 31 We therefore sustain likewise the conviction of petitioners by the Regional Trial Court of Malabon for violation of B.P. Blg. 22 thus Accused-appellants claim that they ordered payment of the checks to be stopped because the goods delivered were not those specified by them. They maintain that they had sufficient funds to cover the amount of the checks. The records of the bank, however, reveal otherwise. The two letters (Exhs. 21 and 22) dated July 23, and August 10, 1983 which they claim they sent to Linton Commercial, complaining against the quality of the goods delivered by the latter, did not refer to the delivery of mild steel plates (6mm x 4 x 8) and "Z" purlins (16 x 7 x 2-1/2 mts) for which the checks in question were issued. Rather, the letters referred to B.1. Lally columns (Sch. #20), which were the subject of other purchase orders. It is true, as accused-appellants point out, that in a case brought by them against the complainant in the Regional Trial Court of Kalookan City (Civil Case No. C-10921) the complainant was held liable for actual damages because of the delivery of goods of inferior quality (Exh. 23). But the supplies involved in that case were those of B.I. pipes, while the purchases made by accused-appellants, for which they issued the checks in question, were purchases of mild steel plates and "Z" purlins. Indeed, the only question here is whether accused-appellants maintained funds sufficient to cover the amounts of their checks at the time of issuance and presentment of such checks. Section 3 of B.P. Blg. 22 provides that "notwithstanding receipt of an order to stop payment,

the drawee bank shall state in the notice of dishonor that there were no sufficient funds in or credit with such bank for the payment in full of the check, if such be the fact." The purpose of this provision is precisely to preclude the maker or drawer of a worthless check from ordering the payment of the check to be stopped as a pretext for the lack of sufficient funds to cover the check. In the case at bar, the notice of dishonor issued by the drawee bank, indicates not only that payment of the check was stopped but also that the reason for such order was that the maker or drawer did not have sufficient funds with which to cover the checks. . . . Moreover, the bank ledger of accused-appellants' account in Consolidated Bank shows that at the time the checks were presented for encashment, the balance of accused-appellants' account was inadequate to cover the amounts of the checks. 32 . . . WHEREFORE, the decision of the Court of Appeals dated 18 September 1992 affirming the conviction of petitioners Manuel Lim and Rosita Lim In CA-G.R. CR No. 07277 (RTC Crim. Case No. 1699-MN); CA-G.R. CR No. 07278 (RTC Crim. Case No. 1700-MN); CA-G.R. CR No. 07279 (RTC Crim. Case No. 1701-MN); CA-G.R. CR No. 07280 (RTC Crim. Case No. 1702-MN); CA-G.R. CR No. 07281 (RTC Crim. Case No. 1703-MN); CA-G.R. CA No. 07282 (RTC Crim. Case No. 1704-MN); and CA-G.R. CR No. 07283 (RTC Crim Case No. 1705-MN), the Court finds the accused-appellants MANUEL LIM and ROSITA LIM guilty beyond reasonable doubt of violation of Batas Pambansa Bilang 22 and are hereby sentenced to suffer a STRAIGHT PENALTY OF ONE (1) YEAR IMPRISONMENT in each case, together with all the accessory penalties provided by law, and to pay the costs. In CA-G.R. CR No. 07277 (RTC Crim. Case No. 1699-MN), both accused-appellants are hereby ordered to indemnify the offended party in the sum of P27,900.00. In CA-G.R. CR No. 07278 (RTC Crim. Case No. 1700-MN) both accused-appellants are hereby ordered to indemnify the offended party in the sum of P32,550.00. In CA-G.R. CR No. 07278 (RTC Crim. Case No. 1701-MN) both accused-appellants are hereby ordered to indemnify the offended party in the sum of P27,900.00. In CA-G.R. CR No. 07280 (RTC Crim. Case No. 1702-MN) both accused-appellants are hereby ordered to indemnify the offended party in the sum of P27,900.00. In CA-G.R. CR No. 07281 (RTC Crim. Case No. 1703-MN) both accused are hereby ordered to indemnify the offended party in the sum of P63,455.00. In CA-G.R CR No. 07282 (RTC Crim. Case No. 1704-MN) both accused-appellants are hereby ordered to indemnify the offended party in the sum of P51,800.00, and In CA-G.R. CR No. 07283 (RTC Crim. Case No. 1705-MN) both accused-appellants are hereby ordered to indemnify the offended party in the sum of P37,200.00 33 as well as its resolution of 6 November 1992 denying reconsideration thereof, is AFFIRMED. Costs against petitioners. SO ORDERED. Padilla, Davide, Jr., Kapunan and Hermosisima, Jr., JJ., concur. November 3, 1925 G.R. No. L-24224 THE PHILIPPINE NATIONAL BANK, plaintiff-appellee, vs. RAMON MAZA and FRANCISCO MECENAS, defendants-appellants. Lutero, Lutero and Maza for appellants. Roman J. Lacson for appellee. Malcolm, J.:

The Philippine National Bank is suing Ramon Maza and Francisco Mecenas on five promissory notes of ten thousand pesos (P10,000) each. Maza and Mecenas executed two of the promissory notes on January 20, 1921, due three months after date. The three other notes due four months after date. The three other notes due four months after date were executed by the same parties on January 21, 1921. One of the above-mentioned notes, typical of the rest reads as follows: P10,000ILOILO, I.F. Jan. 20, 1921. A los tres meses de la fecha, pagaremos mancomunada y solidariamente a la orden del Philippine National Bank, Iloilo, Iloilo, I. F., la cantidad de diez mil (P10,000) pesos en el Philippine National Bank. Iloilo, I. F. Valor Recibido. No. 340 Pagadero el 4/20/21 (Fdos.) RAMOS MAZA FRANCISCO MECENAS The notes were not taken up by Maza and Mecenas at maturity. The obligations with accumulated interest totaled P65,207.73 on September 22, 1924. To recover the amounts stated on the face of the notes with back interest, action was begun by the Philippine National Bank in the court of first instance of Iloilo against Ramon Maza and Francisco Mecenas. The special defense interposed by the defendants was that the promissory notes were sent in blank to them by Enrique Echaus with the request that they sign them so that he, Echaus, might negotiate them with the Philippine National Bank in case of need; that the defendants have not negotiated the promissory notes with the bank, nor have they received the value thereof, or delivered them to the bank in payment of any preexisting debt; and that it was Enrique Echaus who negotiated the noted with the bank and who is accordingly the real party in interest and the party liable for the payment of the notes. Defendants also moved that Echaus be ordered included as one of the defendants. The trial judge denied the motion. Judgment was rendered in favor of the plaintiff and against the defendants jointly and severally for a total of P65,207.73, with interest at 9 per cent on twenty thousand pesos (P5) a day, and with interest at 9 per cent on thirty thousand pesos (P30,000) from September 23, 1924, or at the rate of P7.5 a day, and with costs. Four errors are assigned by the defendants on appeal. The first error relates to the order of the trial judge refusing to require Enrique Echaus to become a party to the action. As the defendants failed to duly except to the order, they are not now entitled to ask this court to review the ruling. Moreover, it is not evident that Echaus was an indispensable party. The other three error go to the merits and rest on the same foundation as the special defense. From the pleadings and the stipulation of facts, it is deduced that the defendants admit the genuineness and due execution of the instruments sued on . Neither do the appellants point out any mistake in regard to the amount and interest that the lower court sentenced them to pay to the plaintiff bank. Predicated on these premises, from whatever point of view we look at the case, we arrive at the same conclusion that the defendants are liable. On the first assumption that Maza and Mecenas were the principals and Echaus the agent, as argued by counsel for the appellee, the principals must fulfill their obligations. On another assumption, which is a fact, that the defendants are exactly what they appear to be, the makers of the negotiable instruments, then they must keep their engagement and must pay as promised. Their liability on the instruments is primary and unconditional. The most plausible and reasonable stand for the defendants is that they are accommodation parties. but as accommodation parties, the defendants having signed the instruments without receiving value therefor and for the purpose of lending their names to some other person, are still liable on the instruments. The law now is that the accommodation party can claim no benefit as such, but he is liable according to the face of his undertaking, the same as if he were himself financially interested in the transaction. The defense is made to the action that the defendants never received the value of the promissory notes. it is, of course, fundamental that an instrument given without consideration does not create any obligation at law

or in equity in favor of the payee. However, to fasten liability upon an accommodation maker, it is not necessary that any consideration should move to him. The consideration which supports the promise of the accommodation maker is that parted with by the person taking the note and received by the person accommodated. While perhaps unnecessary to this decision, it may properly be remarked that when the accommodation parties make payment to the holder of the notes, they have the right to sue the accommodated party for reimbursement, since the relation between them is in effect that of principal and sureties, the accommodation parties being the sureties. Judgment affirmed with costs. Avancea, C. J., Street, Villamor, Ostrand, Johns, Romualdez, and Villa-Real, JJ., concur. G.R. No. L-18751 September 26, 1922 THE PHILIPPINE NATIONAL BANK, plaintiff-appellee, vs. BARTOLOME PICORNELL, ET AL., defendants. BARTOLOME PICORNELL, appellant. G.R. No. L-18915 September 26, 1922 THE PHILIPPINE NATIONAL BANK, plaintiff-appellee, vs. BARTOLOME PICORNELL, ET AL., defendants. JOAQUIN PARDO DE TAVERA, appellant. Recto, Casal & Ozaeta for appellant Picornell. Camus and Delgado for appellant Pardo de Tavera. Roman J. Lacson for appellee. ROMUALDEZ, J.: In a decision rendered January 9, 1922, and amended by an order of February 18th next, the Court of First Instance of Manila sentenced the defendants to pay solidarily to the plaintiff bank of the sum of P28,790.72 with interest at the rate of 9 per centum per annum from May 3, 1921, and costs; and the defendant Bartolome Picornell, to pay said plaintiff the sum of P10,739.11 with interest at 9 per centum per annum, all as aforesaid, deducting the sum of P6,708.82 from such amounts to be paid be the defendants. This total sum which the defendants are required to pay represents the value of a bill of exchange drawn by Bartolome Picornell in favor of the National Bank, plaintiff, against the firm of Hyndman, Tavera & Ventura, now dissolved, its only successor being the defendant Joaquin Pardo de Tavera. The sum of P6,708.82, which the trial court ordered deducted from the value of the bill of exchange, is the proceeds received by the bank from the sale of a part of a certain quality of tobacco shipped by Picornell at Cebu to the Hyndman, Tavera & Ventura company at Manila, the price of which, together with his commission, was received by him from the branch of the plaintiff bank in Cebu, and in consideration whereof he drew the bill from the central office of said bank in Manila and against the said Hyndman, Tavera & Ventura company, the consignee of the tobacco. The P28,790.72, which the defendants are sentenced to pay solidarily to the plaintiff bank, constitutes the value of the tobacco at the date when the bill fell due, as appraised for the purpose. The reasoning of the trial court for fixing the respective responsibilities of the defendants is given in its decision and is as follows: . . . The defendant Pardo de Tavera, successor to Hyndman, Tavera & Ventura, by his having accepted the bill and denied payment thereof, notwithstanding the existence of a consideration which is the real value of the tobacco, and the defendant Picornell by his having drawn such bill and received its value from the branch of the plaintiff bank in Cebu, became liable upon the same bill, the defendant Picornell to its full value, and the defendant Pardo de Tavera to the extent of the value of the tobacco. From this judgment the defendants appealed. Joaquin Pardo de Tavera alleged that the bill in question was without consideration and that judgment should not have been rendered against him. The appellant Picornell contended that it should have been taken into

account that he merely acted as an agent of Hyndman, Tavera & Ventura in all these transactions; that the tobacco was not of inferior quality, as alleged by the said company; that the condition "D/P" attached to the transaction was not modified; that he had the right to complain because the bank consented to the said company taking possession of the tobacco before the payment of the bill; that the bank held the tobacco as a deposit; that the bank was not authorized to sell the tobacco, said sale not being allowed either by law or by the circumstances that he should not have been ordered to pay the value of the bill without proof that he was notified of its dishonor, as required by section 89 of the Negotiable Instruments Law. The appellee bank maintains that the appellants have no right to discuss issues of fact in this instance for not having complied with the requirements enumerated in paragraph (a) of Rule 16 of the Rules of the Courts of First Instance. The rule cited refers to special proceedings. Moreover, we believe, we believe that the necessary requirements in order that this court may pass upon questions of fact have been complied with by the appellants. The following facts are proved: That Bartolome Picornell, following instruction of Hyndman, Tavera & Ventura, bought in Cebu 1,735 bales of tobacco; that Picornell obtained from the branch of the National Bank in Cebu the sum of P39,529.83, the value of the tobacco, together with his commission of 1 real per quintal (according to stipulation Exhibit 4), having, in turn, drawn the following bill of exchange, Exhibit A: No. 2-A. Cebu, 28 febrero, 1920. For P39,529.83 At treinta (30) days sight please pay this first of exchange (second unpaid) to the order of Philippine National Bank treinta y nueve mil quinientos veintinueve pesos con 83/100. Value received. To Sres. HYNDMAN, TAVERA Y VENTURA Calle Soler 26 y 28. (Sgd.) B. PICORNELL This instrument was delivered to the branch of the National Bank in Cebu, together with the invoice and bill of lading of the tobacco, which was shipped in the boat Don Ildefonso, on February 27, 1920, consigned to Hyndman, Tavera & Ventura at Manila. The invoice and bill of lading were delivered to the National Bank with the understanding that the bank should not delivered them to Hyndman, Tavera & Ventura except upon payment of the bill; which condition was expressed by the well-known formula "D/P" (documents for [against] payment). The central office of the National Bank in Manila received the bill and the aforesaid documents annexed thereto; and on March 3, 1920, presented the bill to Hyndman, Tavera & Ventura, who accepted it stating on the face thereof the following: Accepted, 3d March, 1920. Due, 2d April, 1920. Hyndman, Tavera & Ventura, by (Sgd.) J. Pardo de Tavera, member of the firm. The tobacco having arrived at Manila, the firm of Tambunting, owner of the ship Don Ildefonso, that brought the shipment, requested Hyndman, Tavera & Ventura to send for the goods, which was done by the company without the knowledge of the National Bank which retained and always had in its possession the invoice and bill of lading of the tobacco, until it presented them as evidence at the trial. Hyndman, Tavera & Ventura proceeded to the examination of the tobacco, which was deposited in their warehouses, and wrote and cable to Bartolome Picornell, notifying him that of the tobacco received, there was a certain portion which was no use and was damaged. To these communications, Picornell answered, sending the following letter: Cebu, March 13, 1920. Messrs. HYNDMAN, TAVERA & VENTURA, Manila. TABACO DEAR SIRS: Your letters of the 3d and 9th, and your telegram of the 5th, inst, received and the sample of tobacco sent through the captain of the boat Don Ildefonso. I wired to the seller asking him to come over and I hope he will do so at the first opportunity.

It would be well that you should inform me of the exact number of bales deteriorated and useless, and if possible that said information should be furnished by the Bureau of Internal Revenue. Moreover, it would be well also that you should not sell any bale of said shipment until the matter is settled. Yours very truly, (Sgd.) B. PICORNELL Through these communications, therefore, Picornell learned that Hyndman, Tavera & Ventura had in their possession the tobacco aforementioned. In view of the question raised by the said company as to the quality of the aforesaid tobacco, more correspondence was exchange between the company and Picornell, who, upon the suggestion of the former, wrote on March 26, 1920, this letter: Messrs. Philippine National Bank, Cebu. DEAR SIRS: I would be obliged to you if you would wire your central office at Manila to extend thirty days the time for payment of the bill for P39,529.83 against Messrs. Hyndman, Tavera & Ventura of Manila. Awaiting your favor, I remain, Yours very truly, (Sgd.) B. PICORNELL The bank granted this request of the defendants; wherefore Hyndman, Tavera & Ventura reaccepted the bill in the following terms: Accepted for thirty days. Due May 2d, 1920. Hyndman, Tavera & Ventura, By (Sgd.) J Pardo de Tavera, member of the firm. May 2, 1920, arrived and the bill was not paid. On the 4th of the same month, Hyndman, Tavera & Ventura sent a letter to the plaintiff bank as follows: DEAR SIRS: We very much regret to have to inform you that we absolutely refuse to pay draft No. 2 for thirty-nine thousand five hundred and twenty-nine pesos and eighty-three cents (P39,529.83), referring to 1,871,235 quintals of Leaf Tobacco Barili, owing to noncompliance of the contract by the drawer. We, therefore, beg to notify you that the said Lead Tobacco is at the disposal of your goodselves at our go-down No. 26-36 Calle Soler. The bank protested the bill, tool possession of the tobacco, and had it appraised on the 12th of the same month, its value having been fixed at P28,790.72. That this valuation was just, reasonable and exact is not questioned by the parties. The bank brought this action, and about September, 1921, sold the tobacco, obtaining from the sale P6,708.82. This action is for the recovery of the value of the bill of exchange above-mentioned. The Hyndman, Tavera & Ventura company accepted it unconditionally, but did not pay it at its maturity; wherefore its responsibility, or that of its successor, J. Pardo de Tavera, to pay the same, is clear. (Sec. 62, Negotiable Instruments Law.) The question whether or not the tobacco was worth the value of the bill, does not concern the plaintiff bank. Such partial want of consideration, if it was, does not exist with respect to the bank which paid to Picornell the full value of said bill of exchange. The bank was a holder in due course, and was such for value full and complete. The Hyndman, Tavera & Ventura company cannot escape liability in view of section 28 of the Negotiable Instruments Law. . . . The drawee by acceptance becomes liable to the payee or his indorsee, and also to the drawer himself. But the drawer and acceptor are the immediate parties to the consideration, and if the acceptance be without consideration, the drawer cannot recover of the acceptor. The payee holds a different relation; he is a stranger to the transaction between the drawer and the acceptor, and is, therefore, in a legal sense a remote party. In a suit by him against the acceptor, the question as to the consideration between the drawer and the acceptor cannot be inquired into. The payee or holder gives value to the drawer, and if he is ignorant of the equities between the drawer and the acceptor, he is in

the position on a bona fide indorsee. Hence, it is no defense to a suit against the acceptor of a draft which has been discounted, and upon which money has been advance by the plaintiff, that the draft was accepted or the accommodation of the drawer. . . . (3 R. C. L., pp. 1143, 1144, par, 358.) As to Bartolome Picornell, he warranted, as drawer of the bill, that it would be accepted upon proper presentment and paid in due course, and as it was not paid, he became liable to the payment of its value to the holder thereof, which is the plaintiff bank. (Sec. 61, Negotiable Instruments Law.) The fact that Picornell was a commission agent of Hyndman, Tavera & Ventura, in the purchase of the tobacco, does not necessarily make him an agent of the company in its obligations arising from the drawing of the bill by him. His acts in negotiating the bill constitute a different contract from that made by his having purchased the tobacco on behalf of Hyndman, Tavera & Ventura. Furthermore, he cannot exempt himself from responsibility by the fact of his having been a mere agent of this company, because nothing to this effect was indicated or added to his signature on signing the bill. (Sec. 20, Negotiable Instruments Law.) The fact that the tobacco was or was not of inferior quality does not affect the responsibility of Picornell, because while it may an effect upon the contract between him and the firm of Hyndman, Tavera & Ventura, yet it cannot have upon the responsibility of both to the bank, upon the bill drawn and accepted as above stated. As to the instruction "D/P" appearing on the instrument, it was not violated by the bank, which, as above stated, kept possession of the invoice and the bill of lading of the tobacco. By virtue of this circumstance, the bank had the right to deal with that tobacco as a security in case of non-payment of the bill, and this was admitted by Hyndman, Tavera & Ventura when, upon their refusal to pay the bill, they placed the tobacco at the disposal of the bank. Neither does the fact of Hyndman, Tavera & Ventura having been given possession of the tobacco before the payment of the bill affect the liability of the defendants to the bank thereon. The title of the bank to the tobacco in question by reason of the condition "D/P" was that a pledgee, and its possession after its delivery to it by Hyndman, Tavera & Ventura was of the same nature -- a discount security, which it was authorized to accept and retail. (Act No. 2938.) The appellants question the power of the bank to sell, as it did, the tobacco in question. Taking into account the circumstances of the case, we fold that the bank did not violate the law in making such sale without notice. We hold that it is one of those cases provided for by law (sec. 33, Act. No. 2938), wherein a previous notice of the sale is not indispensable. Besides, as to the price obtained in the sale, no question is made that it was the best obtainable. Concerning the notice to Picornell of the dishonor of the bill, it appears from Exhibit C, which is to protest for the non-payment thereof, that a copy of such protest was sent by mail in good season addressed to Bartolome Picornell, the presumption, now conclusive, that the latter received it (secs. 105, 106, Negotiable Instruments Law), not having been rebutted, or at least, contradicted. Upon the non-payment of the bill by the drawee-acceptor, the bank had the right of recourse, which it exercised, against the drawer. (Sec. 84, Negotiable Instruments Law.) The drawee, the Hyndman, Tavera & Ventura company, or its successors, J. Pardo de Tavera, accepted the bill and is primarily liable for the value of the negotiable instrument, while the drawer, Bartolome Picornell, is secondarily liable. (3. R. C. L., pp. 1144, 1145.) However, no question has been raised about this aspect of the responsibility of the defendants. We are of the opinion that the appellants are liable to the National Bank for the value of the bill of exchange Exhibit A, deducting therefrom P6,708.82 the proceeds of the sale of the tobacco. But the bank, not having appealed from the judgment of the lower court, we cannot alter it in favor of said party, which, by its omission to appeal, has shown full conformity with the judgment rendered. For the foregoing, the judgment appealed from is affirmed, with costs against the defendants. So ordered. Araullo, C.J., Street, Malcolm, Avancea, Villamor, Ostrand and Johns, JJ., concur.