1. Pineda v.

Dela Rama
FACTS: Pineda was caught in a case against the NARIC for his alleged
misappropriation of many cavans of palay. He hired Atty. Dela Rama to
delay the filing of the complaint against him, on alleged representation of
the lawyer that he is a friend of the NARIC administrator. Pineda then issued
a promissory note in favor of dela Rama to pay for the advances that the
lawyer made to the administrator to delay the filing of the complaint. Dela
Rama on the other hand contended that the promissory note was for the
loan advanced to Pineda by him. Dela Rama filed an action against Pineda
for the collection of the amount of the note.
Issue: Whether the PN is invalid because of the fact of absence of
consideration. YES
Held: The lower courts state that a person who is a man of business would
not sign a promissory note without a consideration. However, reliance of
the lower court is based on Section 24 of NIL which states the prima facie
presumption of consideration which can be rebutted by proof to the
contrary.
The claims of dela Rama that the promissory note was for a loan advanced
to Pineda is unbelievable. The grant of a loan by a lawyer to a moneyed
client and whom he has known for only 3 months cannot be relied on.
Pineda had actually just purchased numerous properties. It is highly illogical
that he would loan from dela Rama P9500 for 5 days apart.
The consideration for the promissory note - to influence public officers in
the performance of their duties - is contrary to law and public policy. The
promissory note is void ab initio and no cause of action for the collection
cases can arise from it.

2. Phil Bank of Commerce v. Aruego
FACTS: Aruego, who is a president of Philippine Education Foundation
Company, executed 22 transactions involving trust receipts in favor of
PBCom to avail of the services of World Current Events. The proceeds of the
publication of the companys periodicals are held in trust and promise to
turnover to PBCom. The instruments are signed by Aruego, without any
indication that he is an agent of World Current Events. When he was being
held liable by PBCom, he averred that he only signed the instrument in the
capacity of agent of the company. Also, he averred that he only signed the
bill of exchange as an accommodation party or additional party obligor, to
add security.
ISSUES:
1. Whether Aruego should not be held liable because he only signed as
an agent of Philippine Education Foundation Company. No, he
should be held liable
2. Whether Aruego should not be held liable because he only signed as
an accommodation party. No, he should be held liable
HELD:
1. Section 20 of the Negotiable Instruments Law provides that "Where
the instrument contains or a person adds to his signature words
indicating that he signs for or on behalf of a principal or in a
representative capacity, he is not liable on the instrument if he was
duly authorized; but the mere addition of words describing him as
an agent or as filing a representative character, without disclosing
his principal, does not exempt him from personal liability."

An inspection of the drafts accepted by the defendant shows that
nowhere has he disclosed that he was signing as a representative of
the Philippine Education Foundation Company. For failure to
disclose his principal, Aruego should be personally liable.

2. An accommodation party is one who has signed the instrument as
maker, drawer, indorser, without receiving value therefor and for
the purpose of lending his name to some other person. Such person
is liable on the instrument to a holder for value, notwithstanding
such holder, at the time of the taking of the instrument knew him to
be only an accommodation party. In lending his name to the
accommodated party, the accommodation party is in effect a surety
for the latter. He lends his name to enable the accommodated party
to obtain credit or to raise money. He receives no part of the
consideration for the instrument but assumes liability to the other
parties thereto because he wants to accommodate another. In the
instant case, the defendant signed as a drawee/acceptor. Under the
Negotiable Instrument Law, a drawee is primarily liable. Thus, if the
defendant who is a lawyer, he should not have signed as an
acceptor/drawee. In doing so, he became primarily and personally
liable for the drafts.

3. Clark v. Sellner
FACTS: Sellner with two other persons, signed a promissory note solidarily
binding themselves to pay to the order of R.N Clark. The note matured but
the amount wasn't paid. The defendant alleges that he didn't receive any
amount of the debt; that the instrument wasn't presented to him for
payment and being an accommodation party, he is not liable unless the
note is negotiated, which wasn't done.
Issues: Should Sellner be held liable to Clark for being an accommodation
party and without proper negotiation? YES
Held: On the first issue, the liability of Sellner as one of the signers of the
note, is not dependent on whether he has or has not, received any part of
the debt. The defendant is really and expressly one of the joint and several
debtors of the note and as such he is liable under the provisions of Section
60 of the NIL.

As to the presentment for payment, such action is not necessary in order to
charge the person primarily liable, as is the defendant Sellner.

As to whether or not Sellner is an accommodation party, it should be taken
into account that by putting his signature to the note, he lent his name, not
to the creditor, but to those who signed with him placing him in the same
position and with the same liability as the said signers. It should be
notedthat the phrasewithout receiving value therefore as used in section
29 means without receiving value by virtue of the instrument and not, as
it apparently is supposed to mean, without receiving payment for lending
his name. It is immaterial as far as the creditor is concerned, whether one
of the signers has or has not received anything in payment for the use of his
name. In this case, the legal situation of Sellner is that of a joint surety who
upon the maturity of the note, pay the debt, demand the collateral security
and dispose of it to his benefit. As to the plaintiff, he is a holder for value.
4. PNB v. Maza
Facts: Maza and Macenas executed a total of five promissory notes. These
were not paid at maturity. And to recover the amounts stated on the face of
the promissory notes, PNB initiated an action against the two. The special
defense posed by the two is that the promissory notes were delivered to
them in blank by a certain Enchaus and were made to sign the notes so that
the latter could secure a loan from the bank. They also alleged that they
never negotiated the notes with the bank nor have they received any value
thereof. They also prayed that Enchaus be impleaded in the complaint but
such was denied. The trial court then held in favor of the bank.
Issue: Whether Maza and Macenas should be held liable for the 5
promissory notes. YES
Held: The defendants attested to the genuineness of the instruments sued
on. Neither did they point out any mistake in regard to the amount and
interest that the lower court sentenced them to pay. Given such, the
defendants are liable. They appear as the makers of the promissory notes
and as such, they must keep their engagement and pay as promised.
And assuming that they are accommodation parties, the defendants having
signed the instruments without receiving value thereof, for the purpose of
lending their names to some other person, are still liable for the promissory
notes. The law now is such that an accommodation party cannot claim no
benefit as such, but he is liable according to the face of his undertaking, the
same as he himself financially interest in the transaction. It is also no
defense to say that they didn't receive the value of the notes. To fasten
liability however to an accommodation maker, it is not necessary that any
consideration should move to him. The accommodation which supports the
promise of the accommodation maker is that parted with by the person
taking the note and received by the person accommodated.
5. Sadaya v. Sevilla
FACTS:
Sadaya, Sevilla and Varona signed solidarily a promissory note in favor of
the bank. Varona was the only one who received the proceeds of the note
Sadaya and Sevilla both signed as co-makers to accommodate Varona.
Thereafter, the bank collected from Sadaya. Varona failed to reimburse.
Consequently, Sevilla died and intestate estate proceedings were
established. Sadaya filed a creditors claim on his estate for the payment he
made on the note. The administrator resisted the claim on the ground that
Sevilla didn't receive any proceeds of the loan. The trial court admitted the
claim of Sadaya though tis was reversed by the CA.

ISSUE: Whether Sadaya could reimburse payment he made to the Bank with
the estate of Sevilla?

Held: Sadaya could have sought reimbursement from Varona, which is right
and just as the latter was the only one who received value for the note
executed. There is an implied contract of indemnity between Sadaya and
Varona upon the formers payment of the obligation to the bank.
Surely enough, the obligations of Varona and Sevilla to Sadaya cannot be
joint and several. For indeed, had payment been made by Varona, Varona
couldn't had reason to seek reimbursement from either Sadaya or Sevilla.
After all, the proceeds of the loan went to Varona alone.
On principle, a solidary accommodation makerwho made paymenthas
the right to contribution, from his co-accomodation maker, in the absence
of agreement to the contrary between them, subject to conditions imposed
by law. This right springs from an implied promise to share equally the
burdens thay may ensue from their having consented to stamp their
signatures on the promissory note.
The following are the rules:
1. A joint and several accommodation maker of a negotiable
promissory note may demand from the principal debtor
reimbursement for the amount that he paid to the payee
2. A joint and several accommodation maker who pays on the said
promissory note may directly demand reimbursement from his co-
accommodation maker without first directing his action against the
principal debtor provided that
a. He made the payment by virtue of a judicial demand
b. A principal debtor is insolvent.
It was never shown that there was a judicial demand on Sadaya to pay the
obligation and also, it was never proven that Varona was insolvent. Thus,
Sadaya cannot proceed against Sevilla for reimbursement.
6. Republic Bank v. Ebrada
FACTS: Ebrada encashed check issued by the Bureau of Treasury (BoT) to
Republic Bank. The bank later advised BoT that the indorsement of Martin
Lorenzo, the original payee, was a forgery since the later died before the
endorsement was made. Bank refunded BoT, and subsequently demanded
a refund from Ebrada. Ebrada refused alleging that she was a holder in due
course. Third, fourth and so-on party complaint had been filed with the
following, as indorsers,

MARTIN LORENZO RAMON R. LORENZO DELIA DOMINGUEZ
EBRADA.
Issue: Does the existence of a forged signature voids all other negotiations
of the check with respect to the other parties whose signature are genuine?
Can the drawee bank recover from the one who encashed the check?
Held: No, according to jurisprudence only the negotiation based on the
forged or unauthorized signature is inoperative. It can be safely concluded
that it is only the negotiation predicated on the forged indorsement that
should be declared inoperative. This means that the negotiation of the
check in question from Martin Lorenzo, the original payee, to Ramon R.
Lorenzo, the second indorser, should be declared of no affect, but the
negotiation of the aforesaid check from Ramon R. Lorenzo to Adelaida
Dominguez.
Yes, it was held that the drawee of a check can recover from the holder the
money paid to him on a forged instrument. It is not supposed to be its duty
to ascertain whether the signatures of the payee or indorsers are genuine or
not. This is because the indorser is supposed to warrant to the drawee that
the signatures of the payee and previous indorsers are genuine, warranty
not extending only to holders in due course. One who purchases a check or
draft is bound to satisfy himself that the paper is genuine and that by
indorsing it or presenting it for payment or putting it into circulation before
presentation he impliedly asserts that he has performed his duty and the
drawee who has paid the forged check, without actual negligence on his
part, may recover the money paid from such negligent purchasers. In such
cases the recovery is permitted because although the drawee was in a way
negligent in failing to detect the forgery, yet if the encasher of the check
had performed his duty, the forgery would in all probability, have been
detected and the fraud defeated.
In the case at bar, Ebrada upon receiving the check in question from
Adelaida Dominguez, was duty-bound to ascertain whether the check in
question was genuine before presenting it to Republic Bank.

7. United General Industries v. Paler
FACTS: Paler and his wife purchased a TV from United General Industries on
an installment basis which the former secured with PN and a CHM over the
TV. The former defaulted in the installment payments, and also due to
violation in the terms and condition of the CHM an criminal case of estafa
was filed. They settled the criminal case of Paler extra-judicially, and
executed a PN, with Dela Rama as an accommodation party, amounting to
3,083PHP plus 12% interest. And herein after, they also failed to pay the PN
after repeated demands thus the institution of the appeal of the case. Paler
and Dela Rama claim in their appeal that the complaint should have been
dismissed because "the obligation sought to be enforced by plaintiff-
appellee against defendants-appellants arose or was incurred in
consideration for the compounding of a crime."
ISSUE: Whether the PN is void to Paler and Dela Rama by the fact that its
consideration is against public policy? To Paler NO, To Dela Rama YES
HELD: Under the law and jurisprudence, there can be no recovery against
Jose de la Rama who incidentally appears to have been an accommodation
signer only of the promissory note which is vitiated by the illegality of the
cause. But it is different with Jose Paler who bought a television set from
the appellee, did not pay for it and even sold the set without the written
consent of the mortgagee which accordingly brought about the filing of the
estafa case. He has an obligation to the appellee independently of the
promissory note which was co-signed by Jose de la Rama. For Paler to
escape payment of a just obligation will result in an untrust enrichment at
the expense of another. This we cannot in conscience allow.




8. Prudencio v. CA
Doctrine: Notwithstanding that an accommodation party is primarily liable
to a holder for value of NI, if by the acts of the payee the accommodation
party is prejudiced, the holder for value is subject to personal defenses
available to the accommodation party.
FACTS: Prudencio obtained a loan with PNB and secured it with their own
land. They issued a corresponding PN as regards to the loan, which was
signed by Jose Torribio, an attorney-in-fact by the company, and Prudencio.
Such transaction was in consideration of the construction contract of the
principal debtor, Concepcion and Tamayo Construction Company. However,
the 3rd installment releasing of loan as regards the funding of the labor and
materials was not released because of the fact that the loan was already
overdue. The construction contract was rescinded between the Company
and the Bureau of Public Works. As a consequence, the Company
abandoned the work. Prudencio herein now is requesting to cancel the
mortgage in consideration of the loan because the release of funds of the
PN was with the Company and not with them. This is because of the
changes of the terms and conditions of the surrounding contract as the
Deed of Assignments release of payments of Bureau to apply to the loan.
PNB refused. The petitioners were ordered to pay jointly and severally with
their co-makers Ramon C. Concepcion and Manuel M. Tamayo the sum of
P11,900.19 with interest at the rate of 6% per annum from the date of the
filing of the complaint on June 27, 1959 until fully paid and Pl,000.00
attorney's fees. They defaulted. The mortgaged properties were sold in a
public auction and, thus, the institution of this case.
Issue: Whether the disposition of their mortgaged property is proper being
that they are only accommodation party therefore should not be included in
the new contract supporting the accessory contract (mortgage contract). No
it is not proper.
Held: The petitioners contend that as accommodation makers, the nature of
their liability is only that of mere sureties instead of solidary co-debtors such
that "a material alteration in the principal contract, effected by the creditor
without the knowledge and consent of the sureties, completely discharges
the sureties from all liability on the contract of suretyship. " They state that
when respondent PNB did not apply the initial and subsequent payments to
the petitioners' debt as provided for in the deed of assignment, they were
released from their obligation as sureties and, therefore, the real estate
mortgage executed by them should have been cancelled.
Section 29 of the Negotiable Instrument Law provides:
Liability of accommodation party. An accommodation party is one who
has signed the instrument as maker, drawer, acceptor, or indorser, without
receiving value therefor, and for the purpose of lending his name to some
other person. Such a person is liable on the instrument to a holder for value,
notwithstanding such holder at the time of taking the instrument knew him
to be only an accommodation party.
Unlike in a contract of suretyship, the liability of the accommodation party
remains not only primary but also unconditional to a holder for value such
that even if the accommodated party receives an extension of the period for
payment without the consent of the accommodation party, the latter is still
liable for the whole obligation and such extension does not release him
because as far as a holder for value is concerned, he is a solidary co- debtor.
There is, therefore, no question that as accommodation makers, petitioners
would be primarily and unconditionally liable on the promissory note to a
holder for value, regardless of whether they stand as sureties or solidary co-
debtors since such distinction would be entirely immaterial and
inconsequential as far as a holder for value is concerned. Consequently, the
petitioners cannot claim to have been released from their obligation simply
because the time of payment of such obligation was temporarily deferred
by PNB without their knowledge and consent. There has to be another basis
for their claim of having been freed from their obligation. The question
which should be resolved in this instant petition, therefore, is whether or
not PNB can be considered a holder for value under Section 29 of the
Negotiable Instruments Law such that the petitioners must be necessarily
barred from setting up the defense of want of consideration or some other
personal defenses which may be set up against a party who is not a holder
in due course.
A holder for value under Section 29 of the Negotiable Instruments Law is
one who must meet all the requirements of a holder in due course under
Section 52 of the same law except notice of want of consideration.
As to the question if PNB here is a holder in due course, Bureau's release of
three payments directly to the Company instead of paying the same to the
Bank. This approval was in violation of the Deed of Assignment and without
any notice to the petitioners who stood to lose their property once the
promissory note falls due without the same having been paid because the
PNB, in effect, waived payments of the first three releases. From the
foregoing circumstances, PNB can not be regarded as having acted in good
faith which is also one of the requisites of a holder in due course under
Section 52 of the Negotiable Instruments Law. The PNB knew that the
promissory note which it took from the accommodation makers was signed
by the latter because of full reliance on the Deed of Assignment, which, PNB
had no intention to comply with strictly. Worse, the third payment to the
Company in the amount of P4,293.60 was approved by PNB although the
promissory note was almost a month overdue, an act which is clearly
detrimental to the petitioners. Therefore, PNB is not a holder in due course
and subject to the personal defenses such as this.

9. Crisologo-Jose v. CA
DOCTRINE: Signatories of purported agents over a NI without proper
authorities renders them personally liable.
FACTS: Santos, VP of Mover Enterprises in-charge of marketing and sales,
and Benares is the president. Atty. Benares issued check amounting to
45,000 in accommodation to his clients, Jaime and Clarita Ong. Such check
was payable to Ernestina Crisologo-Jose and under the name of Mover
Enterprises. As it is a company check it must be signed by both president
and treasurer, however, the treasurer at that time was not available, VP
Santos signed in behalf of the treasurer as alternate. Consideration of the
check is the waiver or quitclaim by Crisologo-Jose which GSIS sold to Jaime
and Clarita Ong, with the understanding that upon approval by the GSIS of
the compromise agreement with the spouses Ong, the check will be
encashed accordingly. Since the compromise agreement was not yet
completed at the time, Atty Benares and VP Santos replaced the check with
the same amount. When Crisologo-Jose deposited the check, it was
dishonored by the bank because of insufficiency of funds. Therefore,
Crisologo-Jose instituted BP 22.
ISSUE: Whether the accommodation party in this case is Mover Enterprises,
Inc. and not private respondent who merely signed the check in question in
a representative capacity, that is, as vice-president of said corporation,
hence he is not liable thereon under the Negotiable Instruments Law.
NO, MOVER ENTERPRISE NOT HELD LIABLE, Atty. Benares and VP Santos
is.
HELD: To be considered an accommodation party, a person must (1) be a
party to the instrument, signing as maker, drawer, acceptor, or indorser, (2)
not receive value therefor, and (3) sign for the purpose of lending his name
for the credit of some other person. Based on the foregoing requisites, it is
not a valid defense that the accommodation party did not receive any
valuable consideration when he executed the instrument. From the
standpoint of contract law, he differs from the ordinary concept of a debtor
therein in the sense that he has not received any valuable consideration for
the instrument he signs. Nevertheless, he is liable to a holder for value as if
the contract was not for accommodation in whatever capacity such
accommodation party signed the instrument, whether primarily or
secondarily. Thus, it has been held that in lending his name to the
accommodated party, the accommodation party is in effect a surety for the
latter.
An accommodation party liable on the instrument to a holder for value,
although such holder at the time of taking the instrument knew him to be
only an accommodation party, does not include nor apply to corporations
which are accommodation parties. This is because the issue or indorsement
of negotiable paper by a corporation without consideration and for the
accommodation of another is ultra vires. Hence, one who has taken the
instrument with knowledge of the accommodation nature thereof cannot
recover against a corporation where it is only an accommodation party. If
the form of the instrument, or the nature of the transaction, is such as to
charge the indorsee with knowledge that the issue or indorsement of the
instrument by the corporation is for the accommodation of another, he
cannot recover against the corporation thereon. 9
By way of exception, an officer or agent of a corporation shall have the
power to execute or indorse a negotiable paper in the name of the
corporation for the accommodation of a third person only if specifically
authorized to do so. Corollarily, corporate officers, such as the president
and vice-president, have no power to execute for mere accommodation a
negotiable instrument of the corporation for their individual debts or
transactions arising from or in relation to matters in which the corporation
has no legitimate concern. Since such accommodation paper cannot thus be
enforced against the corporation, especially since it is not involved in any
aspect of the corporate business or operations, the inescapable conclusion
in law and in logic is that the signatories thereof shall be personally liable
therefor, as well as the consequences arising from their acts in connection
therewith.

10. Travel-on v. CA
FACTS: Petitioner Travel-on was a travel agency involved in ticket sales on a
commission basis for and on behalf of different airline companies. Miranda
has a revolving credit line with the company. He procured tickets on behalf
of others and derived commissions from it. Petitioner filed a collection suit
against Miranda for the unpaid amount of six checks. Petitioner alleged that
Miranda procured tickets from them which he paid with cash and checks
but the checks were dishonored upon presentment to the bank. This was
being refuted by Miranda by saying that he actually paid for his obligations,
even in the excess. He argued that the checks were for accommodation
purposes only of the General Manager. The General Manager needed to
show to its Board of Directors that its accounts receivable was in good
standing. The RTC and CA held Miranda not to be liable.
ISSUE: Whether Miranda should be held liable for the 6 checks.
HELD: Reliance by the lower and appellate court on the companys financial
statements were wrong, to see if Miranda was liable or not. These financial
statements were actually not updated to show that there was indebtedness
on the part of Miranda. The best evidence that the courts should have
looked at were the checks itself. There is a prima facie presumption that a
check was issued for valuable consideration and the provision puts the
burden upon the drawer to disprove this presumption. Miranda was unable
to relieve himself of this burden.
Only clear and convincing evidence and not mere self-serving evidence of
drawer can rebut this presumption. The company was entitled to the
benefit conferred by the statutory provision. Miranda failed to show that
the checks werent issued for any valuable consideration. The checks were
clear by stating that the company was the payee and not a mere
accommodated party. And also, notice was given to the fact that the checks
were issued after a written demand by the company regarding Mirandas
unpaid liabilities.

11. Town Savings and Loan Bank (TSLB) v. CA
FACTS: The Hipolitos was granted a loan amounting to 700K from TSLB. A
PN was issued with a maturity period of three (3) years and an acceleration
clause upon default in the payment of any amortization, plus a penalty of
36% and 10% attorney's fees, if the note were referred to an attorney for
collection. Hipolitos defaulted. The loan was allegedly for the account of
Pilarita H. Reyes, the Sister of Miguel Hipolito, making the Hipolitos mere
guarantors. They did so because of persuasion of the President of TSLB.
When they received the demand letters, they confronted him but they were
told that the Bank had to observe the formality of sending notices and
demand letters. The real purpose was only to pressure Pilarita to comply
with her undertaking. The trial court held that they were liable as
accommodation parties to the promissory note. This was reversed by the
Court of Appeals.
ISSUE: Whether the Hipolitos are liable on the promissory note which they
executed in favor of the petitioner. YES HIPOLITOS ARE LIABLE HAHA!
HELD: An accommodation party is one who has signed the instrument as
maker, drawer, indorser, without receiving value therefore and for the
purpose of lending his name to some other person. Such person is liable on
the instrument to a holder for value, notwithstanding such holder, at the
time of the taking of the instrument knew him to be an accommodation
party. In lending his name to the accommodated party, the accommodation
party is in effect a surety for the latter. He lends his name to enable the
accommodated party to obtain credit or to raise money. He receives no part
of the consideration for the instrument but assumes liability to the other
parties thereto because he wants to accommodate another. In the case at
bar, it is indisputable that the spouses signed the promissory note to enable
Reyes to secure a loan from the bank. She was the actual beneficiary of the
loan and the spouses accommodated her by signing the note.

12. Claude Bautista v. Auto Plus Traders
FACTS: Claude Bautista, President of Cruiser Bus Lines and Transport
Corporation, purchased spare parts from Auto Plus Traders and issued two
post-dated checks for it. The checks were subsequently dishonored. Thus
the institution of BP 22 by Auto Plus Traders. Demurrer of evidence was
granted because of reasonable doubt upon the guilt of the accused however
Cruiser Bus Lines and Transport Corporation is directed to pay, THROUGH
THE BAUTISTA, of the amount of the 2 issued checks.
ISSUE: Whether Bautista, as an officer of the corporation, is personally and
civilly liable to the private respondent for the value of the two checks.
Deemed an accommodation party to the check of the firm, deemed not an
accommodation party as to the personal check he issued absent the 3
rd

element which is he must sign for the purpose of lending his name or
credit to some other person.
HELD: Under Section 29 of the Negotiable Instruments Law, an
accommodation party is liable on the instrument to a holder for value.
Private respondent adds that petitioner should also be liable for the value of
the corporation check because instituting another civil action against the
corporation would result in multiplicity of suits and delay. Of the two
checks, one was found to that of the corporation and the other one that of a
personal check of Bautista. To be an accommodation party: (1) he must be
a party to the instrument, signing as maker, drawer, acceptor, or indorser;
(2) he must not receive value therefor; and (3) he must sign for the purpose
of lending his name or credit to some other person. Therefore, Bautista is
deemed not an accommodation party as to the personal check he issued
absent the 3rd element; Cruiser Bus Lines and Transport Corporation,
however, remains liable for the checks especially since there is no evidence
that the debts covered by the subject checks have been paid.

13. Eusebio Gonzales v. PCIB
FACTS: Gonzales obtained a credit-on-hand loan agreement (COHLA) serving
his deposits as his collateral. Gonzales drew from the line thru issuance of a
check thru FCD account. Subsequently Gonzales and his wife, with the
Panlilios obtained 3 loans totaling amount of 1.8 million with a REM.
Panlilios obtained the proceeds of the loan. Panlilios interest dues were
made payment thru automatic debit of their account in PCIB, however, they
defaulted on July 1998 because they did not maintained enough deposits.
Meanwhile, Gonzales issued another check in favor of Unson drawn against
COHLA, however, upon presentment of Unson it was dishonored by PCIB
because of withdrawal of the line, unpaid periodic interest dues.
Consequently, PCIB froze the FCD account. Gonzales had a falling out with
Unson due to the dishonor of the check. Gonzales demanded PCIB to credit
back its account as it is sufficient. PCIB refused, thus this case.
ISSUE: Whether Gonzales is solidarily liable with the 1.8M YES
HELD: First, Gonzales admitted that he is an accommodation party which
PCIB did not dispute. In his testimony, Gonzales admitted that he merely
accommodated the spouses Panlilio at the suggestion of Ocampo, who was
then handling his accounts, in order to facilitate the fast release of the loan.
The first note for PhP 500,000 was signed by Gonzales and his wife as
borrowers, while the two subsequent notes showed the spouses Panlilio
sign as borrowers with Gonzales. It is, thus, evident that Gonzales signed, as
borrower, the promissory notes covering the PhP 1,800,000 loan despite
not receiving any of the proceeds. Therefore, as an accommodation party,
Gonzales is solidarily liable with the spouses Panlilio for the loans. 2.