4/7/2021 E-Library - Information At Your Fingertips: Printer Friendly the rights of holders in due course without rendering the drawer liable on the instrument to such holders.[83] Stated differently, stopping payment does not discharge the liability of the drawer of a check or other bill to the payee or other holder.[84] However, where payment has been stopped by the drawer the relation between the drawer and payee becomes the same as if the instrument had been dishonored and notice thereof given to the drawer.[85] Thus, the drawer's conditional liability is changed to one free from the condition and his situation is like that of the maker of a promissory note due on demand; and he is liable on the instrument if he has no sufficient defense. [86] In the instant case, on July 27, 2002 Llorente applied for and executed a Stop Payment Order (SPO) on the subject demand/bank drafts on the pretext that the said drafts which he issued/negotiated to SCPL allegedly exceeded the amount he was obliged to pay SCPL[87] contrary to his position that SCPL committed fraud and unfair gaming practices. The execution of the SPO by Llorente did not discharge the liability of EPCIB, the drawer, to SCPL, the holder of the subject demand/bank drafts. Given that an SPO was issued, the dishonor and non-payment of the subject demand/bank drafts were to be expected, triggering the immediate right of recourse of the holder to all parties secondarily liable, including the drawer, pursuant to the NIL. As the RTC noted: " [Llorente and EPCIB] could not seek refuge on the alleged lack of notice of dishonor to them since they were responsible for the dishonor of the subject drafts aside from the fact that it would be futile to require such notice since it was EPCIB who countermanded the payment."[88] The finding of both the RTC and the CA that SCPL is a holder in due course is not even disputed by EPCIB in its Comment[89] dated October 4, 2014 to the SCPL Petition. To recall, EPCIB merely argued that the CA was correct in absolving it from liability by applying the principle of unjust enrichment.[90] EPCIB added that it had no privity of contract between SCPL and Llorente.[91] Under Section 57 of the NIL, "[a] holder in due course holds the instrument free from any defect in the title of prior parties, and free from defenses available to prior parties among themselves, and may enforce payment of the instrument for the full amount thereof against all parties liable thereon." In addition, under Section 51 of the NIL, every holder of a negotiable in instrument may sue thereon in his own name; and payment to him in due course discharges the instrument. Having recognized the status of SCPL as a holder in due course and EPCIB as the drawer of the subject demand/bank drafts, was the CA correct in absolving EPCIB from any liability in view of the Indemnity Agreement dated August 8, 2002 between Llorente and EPCIB? In absolving EPCIB from liability, the CA forwarded the following justification: Relative to EPCIB's solidary liability, We deem it proper to discharge it from any responsibility considering that it already paid Llorente the face value of the subject drafts amounting to US $300,00[0].00 as evidenced by the Quitclaim, Indemnity and Confidentiality Agreement executed on 8 August 2002. It would be very unfair to hold EPCIB the total amount of the subject https://elibrary.judiciary.gov.ph/thebookshelf/showdocsfriendly/1/65911 14/22