Asia Banking Corp. v. Javier ( G.R. No. 19051 )
April 04, 1923
Facts
On May 10, 1920, Salvador B. Chaves drew a check for P11,000 on the Philippine National Bank in favor of La Insular.
On June 25, 1920, Chaves drew another check for P18,785.30 on the same bank in favor of La Insular.
Both checks were endorsed by the limited partners of La Insular and deposited by Chaves in his account with Asia
Banking Corporation.
The checks were used by Chaves by drawing on his account with Asia Banking Corporation.
The checks were later presented for payment to the Philippine National Bank, which refused to pay due to insufficient
funds.
Issues
Whether the defendant, as an endorser, is liable for the payment of the dishonored checks.
Whether the plaintiff provided the necessary notice of dishonor to the defendant as required by law.
Ruling/Ratio
The Supreme Court ruled that the liability of the defendant as an endorser never arose due to lack of notice of dishonor.
According to Section 89 of the Negotiable Instruments Law (Act No. 2031), notice of dishonor must be given to the
drawer and each endorser.
The plaintiff failed to provide proof that such notice was given to the defendant.
The judgment of the lower court was reversed, and the defendant was absolved from the complaint without special
pronouncement as to costs.