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c. Drawee SEC 128 Bill Addressed to More Than 1 Drawee A bill may be addressed to 2 or more drawees jointly, whether they are partners or not b!t not to 2 or more drawees in the alternati"e or in s!##ession SEC 1$% &hen Bill may be Treated as a 'romissory (ote &here in a bill the drawee and the drawer are the same person, or where the drawee is a )i#titio!s person, or a person not ha"in* #apa#ity to #ontra#t, the holder may treat the instr!ment either as a bill o) e+#han*e or '( Where the instrument is addressed to a drawee, he must be named or otherwise indicated therein with reasonable certainty Instrument may be addressed jointly but not in the alternative where the drawee and the drawer are the same person, or where the drawee is a fictitious person, or a person not having capacity to contract, the holder may treat the instrument either as a bill of exchange or PN bec otherwise, no one can ever be made primarily liable on the bill. If the bill names no drawee but is accepted by a 3 rd party, although the issuer of the bill cant be held as drawer, the acceptor could be held as a ma er. !he instrument is treated as a note instead of a bill 3. Waives the benefit of any law intended for the advantage or protection of the obligor 5 6ives the holder an election to re7uire something to be done in lieu of the payment of money Nothing in this section shall validate any provision that is illegal &n instrument may state that the note is secured by the pledge or mortgaged property, but also that the collateral may be sold for discharging the debt evidenced by the instrument, thus discharging the instrument itself. &n authori+ation, however, which empowers the holder to sell the collateral before the maturity of the note renders it non8 negotiable, bec it would grant the holder an option to accelerate the maturity, thus rendering the time of payment uncertain.

8. PROVISIONS NOT AFFECTING NEGOTIABILITY "#$ % &dditional Provisions not &ffecting Negotiability ' &n instrument which contains an order or promise to do any act in addition to the payment of money is not negotiable. (ut the negotiable character of an instrument is not affected by a provision which) *. &uthori+es the sale of collateral securities in case the instrument be not paid at maturity, or -. &uthori+es confession on judgment .!/I" I" 01I2334

CASE PNB V MANILA OIL REFINING !he ma er of the PN in this case was not able to pay the instrument at maturity !he ma er authori+ed any lawyer to appear and confess judgment for the principal amount and waives all errors and right to institution and appeal 9ember of the business community were unanimous against the recognition of courts of judgment notes Neither the civil code nor any other remedial statute expressly recogni+e a confession of judgment. $onstitution) no person shall be deprived of his property without due process $iv Pro provides that in case the defendant omits to set up a counterclaim shall be barred 0alidity and fulfillment of contracts cant be left to the will of * of the contracting parties !he ma er argues that NI: recogni+es judgment on notes :1W#; $1<;!) ;<:#2 I=1 9&>#; Page 1 of 5

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"$) !he portion of the <niform :aw is only applicable in jurisdictions where judgment on notes are allowed. the last sentence of the provision provides that nothing in the section shall validate an illegal stipulation ?udgments by confession was a 7uic remedy but its disadvantaged to the commercial world outweighs such advantage Warrants of lawyers are void as against public policy bec they enlarge the field for fraud, bec under these instruments, the promissory bargains away his right to a day in court. !his reorgani+es the commercial customs with reference to short term obligations. It can be a source of abuse and oppression HELD: RTC REVERSED. REMANDED 9. OMISSIONS NOT AFFECTING NEGOTIABILITY SEC , -missions Seal 'arti#!lar Money "alidity and ne*otiable #hara#ter o) an instr!ment are not a))e#ted by the )a#t that 1. /t is not dated 2. Doesnt spe#i)y "al!e *i"en, or that any "al!e has been *i"en $. Doesn0t spe#i)y the pla#e where it is drawn or pla#e where it is payable 1. Bears a seal 2. Desi*nates a parti#!lar #!rrent money in whi#h payment is to be made & date in a bill or note is not essential to ma e it negotiable. if it is not dated, and the date is necessary to fix the maturity of the instrument, the law fills the gap and considers the date of issue as the date of the instrument and allows holder to insert true date It is not necessary to express the value bec it is presumed to have been issued for a valuable consideration. If no place is mentioned, the law fills in the gap by providing that presentment should be made at the address of the person who is to pay, if such address if stated, if not, at the place of business or residence of the person to ma e payment

10. R LES OF CONSTR CTION "#$ *@ $onstruction where instrument is ambiguous *. Where there is discrepancy between the sum payable expressed in words and in figures, the sum denoted in words is the sum payable, but if words are ambiguous, refer to the figures -. Payment of interest without specifying the date) the interest runs from the date of the instrument, if undated, from the date of issue 3. Not dated) considered to be dated as of time it was issued 5. Written vs Printed) written provisions will prevail %. (ill vs Note) holder may treat it as either at his election A. where it is not clear as to what capacity the signor intended) he is deemed an indorser @. Where an instrument containing the words BI promise to payC is signed by - or more persons, they are deemed to be jointly and severally liable .solidary4 $&"#) $1N!IN#N!&: 0 $:#9#N! !his is a suit on the PN signed by $lement and !horpe $:#9#N! argues that the note is a joint obligation of the ma ers and the plaintiff cant recover bec * of them was not made a party defendant "$) where an instrument containing words BI promise to payC is signed by - or more persons, they are deemed jointly and severally liable HELD: IFO Ba!" #$%!& a!' (e)era*+ &,ere %( !$ !ee' &$ -$%! &,e $&,er 'e.e!'a!&( /ec /a!" ca! 01r(1e %&( c*a%2 a3a%!(& $!e $. &,e 2a"er(. Page 2 of 5

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ADDITIONAL CASES PACHECO V CA "pouses Pacheco are engaged in construction business !hey made the *st loan from 9rs 0icencio for P *D,DDD Instead of merely re7uiring a note of indebtedness, 9r 0icencio as ed Pachecos to issue undated chec .E *D*@%A4 as evidence of the loan, which will not be presented to the ban Pachecos informed 0icencios that their ban didnFt have funds. 9rs 0icencio insisted that the chec was only a formality 0irginia Pacheco issued on 9ay *@, *GHG an undated chec for *D , she only received G bec the interest was already deducted. !he husband also signed the chec . ?une *GHG, 0irginia obtained another loan from 9rs 0icencio for %D , interest was deducted and so was the previous loan. "he received only 3% With the payment of the previous debt, 0irginia as ed for the return of the *st chec .E*D*@%A4 but it was never returned =or the new loan, 0irginia was re7uired to issue 3 more chec s .for the %D loan4, she was assured by 9rs 0icencio that the chec s will not be presented. "o 0irginia issued 3 undated chec s .Es *D*@H3, *D*@H5 and *D*@H%4. /usband also signed the chec 0irginia obtained - more loans and again she issued chec s with the same assurance .only as evidence of indebtedness in lieu of PN4 A chec s were given .total H% 4 but the total loan is @% and Pachecos were able to pay AD , leaving *% balance Pachecos were not able to pay the balance despite demands 9r and 9rs 0icencio went to Pachecos and persuaded 0irginia to place the date &ug *GG- on - chec s 0irginia reiterated that their account with ;$($ has been closed since *GHG. 0icencios insisted Pacheco were surpised to receive a demand letter since the chec s were dishonoured 9r 0icencio .with whom petitioners never had any transaction4 filed - info for #stafa. It was amended to alleged that through fraud and in payment of a diamond ring, Pachecos issued the chec s

;!$) ;<:#2 I=1 0I$#N$I1 $&) &==I;9#2 ;<:#2 I=1 0I$#N$I1 "$) !he essential elements in order to sustain a conviction under estafa) *. that the offender postdated or issued a chec in payment of an obligation contracted at the time the chec was issued, -. that such postdating or issuing a chec was done when the offender had no funds in the ban , or his funds deposited therein were not sufficient to cover the amount of the chec , 3. deceit or damage to the payee thereof !he *st and 3rd elements are not present in this case (y mutual agreement of the parties, the negotiable character of a chec may be waived and the instrument may be treated as proof of obligation there cant be deceit on the part of Pacheco bec there was an agreement that the chec s will not be cashed. !he chec s are nothing but evidence of the loan & drawer who issues a chec as evidence of indebtedness is not liable for #stafa 0icencios could not have been deceived 9r 0icencio, who is a former judge, should have nown that he need not as 0irginia to place the date on the chec bec as holder, he cold have inserted the date pursuant to "ec *3 of NI: Page 3 of 5

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"ec *-) a negotiable instrument is not rendered invalid by reason that it is antedated $hec s must be presented within a reasonable time from issue. It has been more than 3 years since chec s were issued A chec s were given by Pachecos, why were only - encashed PachecoFs though are not without liability. they should pay *% I interest AC4 ITTED OF ESTAFA B T made their claim. !hus, "ala+ar and :amecs averred that petitioners are in estoppel and guilty of laches. &fter pre8trial 9ercator moved for summary judgment bec there is no factual issue to be litigated. #vangelista admitted the PNs, continuing suretyship agreement and subse7uent PNs, hence there is no genuine issue regarding their liability

HELD: PACHECO( ORDERED TO PAY

;!$) 6ranted motion on summary judgment and ruled ifo 9ercator spouses are solidarily liable 9; denied $&) !he fact that they signed the subject promissory notes in the.ir4 personal capacities a!' as officers of the said debtor corporation is manifest on the very face of the said documents of indebtedness #ven assuming ar31e!'$ that they did not, the appellants lose sight of the fact that third persons who are not parties to a loan may secure the latter by pledging or mortgaging their own property In constituting a mortgage over their own property in order to secure the purported corporate debt of #mbassy =arms, Inc., the appellants undeniably assumed the personality of persons interested in the fulfillment of the principal obligation who, to save the subject realities from foreclosure and with a view towards being subrogated to the rights of the creditor, were free to discharge the same by payment PetitionersF Bprocrastination for about nine .G4 years is difficult to understand. 1n so flimsy a ground as lac of consideration, .w4e may even venture to say that the complaint was not worth the time of the courts.C "$) $& &==I;9#2 "ummary judgment proper !he provisions of the instruments reflect solidary liability !here was nothing ambiguous about the instruments

SPO SES EVANGELISTA V MERCATOR #vangelistas filed a complaint for annulment of title vs 9ercator, "ala+ar, :amecs ;ealty and ;12 !hey claim to won % parcels of land contained in a ;#9 executed by them and #mbassy =arms #vangelistas alleged that they signed the ;#9 ifo of 9ercator only as officer of #mbassy =arms "ince the mortgage was without consideration as to them , since they didnFt received the proceeds of the loan, the ;#9 is void. #vangelistas also assailed the validity of the foreclosure proceedings conducted by 9ercator, then the subse7uent sale to "ala+ar and the transfer to lamecs 9ercator admitted that the #vangelistas were the owners of the % parcels but contends that in *GH-, #vangelistas executed ;#9 in their favor. "pouses signed in the PN as co8ma ers and they also executed a $ontinuing "uretyship &greement and the PNs for restructuring the notes. spouses are jointly and severally liable with #mbassy. bec of their failure to pay, foreclosure and subse7uent sale and transfer are valid "ala+ar and :amecs asserted that they are innocent purchasers for value and in good faith. (oth respondents li ewise assailed the long silence and inaction by petitioners as it was only after a lapse of almost ten .*D4 years from the foreclosure of the property and the subse7uent sales that they

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Petitioners do not dispute signing the continuining suretyship agreement. & surety is one who is solidarily liable with the principal. Petitioners cant present parole evidence

HELD: DISMISSED R LED IFO MERCATOR

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