Acuna v.

Veloso

Facts: In December 1921, defendant Xavier, wanted to purchase a property in Legarda, Manila and
asked co-defendant Veloso to assist him with the purchase. The pair approached intervenor appellee
Gonzalez to advance to them the funds (Php 25,000). Gonzalez agreed on the condition that the pair
should make a joint and several note for the fund, and that Xavier should agree to purchase a one half
interest possessed by Gonzalez in a mortgage credit on a property in Pangasinan amounting to Php
22,052.

The parties agreed to the terms and signed an undated promissory note with the name of the payee left
blank. It states:

"On or before six months after date we will jointly and severally pay in Manila to the order of . ........ . . ...
the sum of twenty-five thousand pesos (P25,000), Philippine currency, for value received of the same in
cash, for commercial operations, and with interest at 10 per cent per annum, payable monthly.”

On 20 December 1921 Gonzalez handed a check for Php 25,000 to Xavier who immediately handed it to
the agent of the Legarda property, effecting the purchase. In exchange, Xavier handed the note to
Gonzalez who then wrote his name as payee and dated it 20 December 1921.

Gonzalez successfully negotiated the note to Petitioner Acuna two years after the note was due. The
latter then demanded the value of the note from defendants with 10% interest. Xavier denied liability
for the note as he had already sold the Legarda property to another, whom he says should inherit the
debt. Veloso also denied liability on the ground that Acuna is not a holder in value and is in bad faith.

The RTC ruled in favor of Acuna, ordering defendants to pay him Php 25,000 with 10% interest from 21
December 1921 and costs of the suit. In addition, the court also ordered that Veloso may indemnify
Xavier for costs incurred by the judgement, as well as transferring the rights of the Petitioner to the
mortgage given by Xavier to secure the debt to Veloso.

Issue: Can Petitioner enforce the note if it was transferred to him after the due date?

Ruling: Yes. Petitioner gave full value for the note and acquires the rights of the original holder Gonzalez
who advanced the face value of the note to its makers at the time of its creation. Value was given for
the note and that is enough to allow it to be enforceable for the Petitioner.