PNB v. Picornell G.R. No.

18915
September 26, 1922 Romualdez , J.
TOPIC IN SYLLABUS: Liability of Secondary Parties – Drawer
SUMMARY: Picornell, agent of Hyndman, Tavera & Ventura Company, bought tobacco in Cebu. He obtained
P39k from Cebu Branch of PNB (value of tobacco). He drew a Bill of Exchange and delivered it to the Cebu
Branch. H,T, &V refused to pay because tobacco was of inferior quality. PNB sold the tobacco. Court held
that Picornell and HT&V were liable to PNB because the bank was a HiDC/payee. It was a stranger to the
transaction between drawer (Picornell) and acceptor (HT&V).
FACTS:
 Bartolome Picornell, agent of Hyndman, Tavera & Ventura (H,T, & V) bought 1,735 bales of tobacco in
Cebu
 He obtained P39,529.38 from the National Bank in Cebu (branch of PNB), which was the value of the
tobacco and his commission.
 He drew a bill of exchange, delivered to National Bank in Cebu, with the bill of lading and invoice.
 Tobacco shipped by firm of Tambunting, consigned to Hyndman, Tavera and Ventura.
 Invoice and Bill of Lading delivered to the National Bank with the understanding that the bank should not
deliver them to Hyndman, Tavera & Ventura except upon payment of the bill. This condition was expressed
by the wellknown formula "D/P" (documents for/against payment).
 National Bank presented the documents to H, T, & V, who accepted it.
 Tambunting requested H,T, & V to send for the good. This was done without knowledge of the Bank, who
retained the invoice and bill of lading.
 H,T,&V cabled Picornell stating that there was a portion of tobacco which was of no use/damaged.
 Picornell advised H,T, & V not to sell the tobacco until the matter is settled. He also learned that the
tobacco was in the possession of H,T, & V. He wired PNB asking for an extension of 30 days to pay the
obligation. Bank granted request.
 Bill was not paid because H,T, & V refused to pay owing to the non-compliance of the contract by the
drawer. They notified Bank that the tobacco was at their disposal
 Bank protested the bill, took possession of the tobacco and then sold it for P6,708.82.

PICORNELL’S ARGUMENTS:
 It should have been taken into account that he merely acted as an agent of Hyndman, Tavera & Ventura
 Tobacco was not of inferior quality
 Condition "D/P" attached to the transaction was not modified
 He has the right to complain because the bank consented to the said company taking possession of the
tobacco before the payment of the bill
 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
 Should not have been ordered to pay value of the bill w/o proof that he was notified of dishonor, as
required by sec 89 of NIL.

TAVERA’S ARGUMENTS (Joaquin Pardo de Tavera – successor of dissolved H,T, & V)

 Bill in question was without consideration

PNB’S ARGUMENTS: (see HELD)

HELD:
 Hyndman, Tavera & Ventura company accepted bill of exchange unconditionally, but did not pay it at its
maturity.
 Its responsibility, or that of its successor, J. Pardo de Tavera, to pay the same, is clear. (Sec 62, NIL)
 Question of whether or not the tobacco was worth the value of the bill, does not concern the PNB. Such
partial want of consideration, if it was, does not exist with respect to the bank, which paid to Picornell the
full value of 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 sec 28 of NIL.
o Drawee by acceptance becomes liable to the payee or his indorsee, and also to the drawer himself.
o Drawer and acceptor are the immediate parties, payee is a stranger to the transaction between drawer
and acceptor.
o If the acceptance be without consideration, the drawer cannot recover of the acceptor.

Lopez, Catherine Nicole CASE #77

 o In a suit by payee against acceptor, question of 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 a bona fide indorsee.
 Re: liability of Picornell
o He warranted, as drawer of 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/PNB.
o Fact that Picornell was a commission agent of H,T, & V, 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.
His acts in negotiating the bill constitute a different contract from that made by his having purchased
the tobacco on behalf of H,T, & V.
o 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, NIL)
 The fact that the tobacco was of inferior quality does not affect the responsibility of Picornell to PNB. While
it may have an effect upon the contract between him and H,T, & V. Both Picornell and H,T, & V are still
liable to Bank.
 As to the instruction "D/P" appearing on the instrument, it was not violated by the bank. It kept possession
of the invoice and the bill of lading of the tobacco. PNB had the right to deal with that tobacco as a security
in case of nonpayment of the bill
 The title of PNB to the tobacco by reason of the condition "D/P" was that of a pledgee, and its possession
after its delivery to it by H, T, & V was of the same nature—a discount security, which it was authorized to
accept and retain.
 One of those cases provided for by law (sec. 33, Act No. 2938), wherein a previous notice of the sale is not
indispensable.
 Notice to Picornell of the dishonor of the bill, (which is the protest for the non payment) that a copy of such
protest was sent by mail addressed to Bartolome Picornell, the presumption, now conclusive, that he
received it.

Appellants liable to PNB for value of the bill of exchange, deducting P6,708.82 (proceeds of the sale)
Liability: Picornell (having drawn the bill and received value) = full value, and Tavera = extent of the value of
the tobacco.

Lopez, Catherine Nicole CASE #77