G.R. No. 18751 & 18915. September 26, 1922.
THE PHILIPPINE NATIONAL BANK, plaintiff-appellee, vs. BARTOLOME PICORNELL, ET AL., defendants. BARTOLOME PICORNELL, appellant. THE PHILIPPINE NATIONAL BANK, plaintiff-appellee, vs. BARTOLOME PICORNELL, ET AL., defendants. JOAQUIN PARDO DE TAVERA, appellant.

FACTS

Bartolome Picornell, acting on instructions from the firm Hyndman, Tavera & Ventura, purchased tobacco in Cebu. He obtained the value of the tobacco plus his commission from the Cebu branch of the Philippine National Bank (PNB). In consideration, Picornell drew a 30-day sight bill of exchange in favor of PNB against Hyndman, Tavera & Ventura. The bill, along with the invoice and bill of lading for the shipped tobacco, was delivered to PNB Cebu with the condition “D/P” (documents against payment). The central office of PNB in Manila presented the bill to Hyndman, Tavera & Ventura, which accepted it through its member, Joaquin Pardo de Tavera. Upon the tobacco’s arrival, Hyndman, Tavera & Ventura took possession from the carrier without PNB’s knowledge, as PNB retained the documents. The firm later complained about the quality of the tobacco. Upon the bill’s maturity, Hyndman, Tavera & Ventura (with Pardo de Tavera as successor) refused payment. PNB then took possession of the tobacco, sold part of it, and applied the proceeds. PNB sued Picornell (the drawer) and Pardo de Tavera (the acceptor) for the unpaid balance. The trial court held them solidarily liable, deducting the proceeds from the sale. Both defendants appealed.

ISSUE

1. Whether the acceptor (Pardo de Tavera) is liable on the bill despite claims of lack of consideration and prior possession of the goods.
2. Whether the drawer (Picornell) is liable, considering his defenses of acting as an agent, alleged violation of the “D/P” term, unauthorized sale of the tobacco by PNB, and lack of notice of dishonor.

RULING

The Supreme Court affirmed the trial court’s judgment.
1. *Liability of the Acceptor (Pardo de Tavera): The acceptance of the bill by Hyndman, Tavera & Ventura made it primarily liable. The defense of lack of consideration is unavailing because the tobacco shipment constituted the consideration for the bill. The fact that the firm obtained physical possession of the tobacco before paying the bill did not discharge its liability, as PNB retained the documents of title and its right as a pledgee. The acceptor’s liability on the instrument is independent of the quality of the goods.
2. Liability of the Drawer (Picornell):* As drawer, Picornell is secondarily liable. The defense of agency does not shield him from personal liability on the bill he signed. The “D/P” instruction was not violated by PNB, which kept the documents. PNB, as a pledgee of the tobacco, had the authority to sell it upon non-payment, and the sale under the circumstances (with the goods perishable and their value declining) was justified without prior notice. Notice of dishonor was duly sent to Picornell by mail, and the presumption of receipt was not rebutted. Therefore, PNB properly exercised its right of recourse against him.
The Court declined to modify the judgment in favor of PNB as the bank did not appeal.