4/7/2021 E-Library - Information At Your Fingertips: Printer Friendly possession funds of such buyer, ordering the addressee to pay the purchase price to the seller of the goods. Where the order is made by one bank to another bank, as in this case, it is referred to as a bank draft. Needless to say, the bank drafts, subject of this case are negotiable instruments and are therefore governed by the provisions of the Negotiable Instruments Law.[76] Both the RTC and CA correctly recognized EPCIB as the drawer of the subject demand/bank drafts. The liability of the drawer is spelled out in Section 61 of the NIL, which provides: Sec. 61. Liability of drawer. - The drawer by drawing the instrument admits the existence of the payee and his then capacity to indorse; and engages that, on due presentment, the instrument will be accepted or paid, or both, according to its tenor, and that if it be dishonored and the necessary proceedings on dishonor be duly taken, he will pay the amount thereof to the holder or to any subsequent indorser who may be compelled to pay it. But the drawer may insert in the instrument an express stipulation negativing or limiting his own liability to the holder. When the bank, as the drawer of a negotiable check, signs the instrument its engagement is then as absolute and express as if it were written on the check;[77] and a dual promise is implied from the issuance of a check: first, that the bank upon which it is drawn will pay the amount thereof; and second, if such bank should fail to make the payment, the drawer will pay the same to the holder.[78] Generally, by drawing a check, the drawer: admits the existence of the payee and his then capacity to endorse; impliedly represents that he (the payee) has funds or credits available for its payment in the bank in which it is drawn; engages that if the bill is not paid by the drawee and due proceedings on dishonor are taken by the holder, he will upon demand pay the amount of the bill together with the damages and expenses accruing to the holder by reason of the dishonor of the instrument; and, if the drawee refuses to accept a bill drawn upon him, becomes liable to pay the instrument according to his original undertaking.[79] However, the liability of the drawer is not primary but secondary, particularly after acceptance because it is conditional upon proper presentment and notice of dishonor, and, in case of a 'foreign bill of exchange, protest, unless such conditions are excused or dispensed with.[80] Thus, under Section 84 of the NIL, when the instrument is dishonored by non-payment, an immediate right of recourse to all parties secondarily liable thereon accrues to the holder, subject to the provisions of the NIL. Regarding the effect of countermand or stopping payment, the drawer of a bill, including a draft or check, as a general rule, may by notice to the drawee prior to acceptance or payment countermand his order and command the drawee not to pay, in which case the drawee is obliged to refuse to accept or pay.[81] There are however cases which hold that a draft drawn by one bank upon another and bought and paid for by a remitter, as the equivalent of money or as an executed sale of credit by the drawer, is not subject to rescission or countermand so as to avoid the drawer's liability thereon.[82] Moreover, the right to stop payment cannot be exercised so as to prejudice https://elibrary.judiciary.gov.ph/thebookshelf/showdocsfriendly/1/65911 13/22