MECANISMO DE EMPUJE

Appellants are the owners of a property, which they mortgaged to help secure a loan of a certain Domingo Prudencio. On a later date, they were approached by their relative who was the attorney-in-fact of a construction company, which was in dire need of funds for the completion of a municipal building. After some persuasion, the appellants amended the mortgage wherein the terms and conditions of the original mortgage was made an integral part of the new mortgage. The promissory note covering the “second loan” was signed by their relative. It was also signed by them, indicating the request that the check be released by the bank.

After the amendment of the mortgage was executed, a deed of assignment was made by Toribio, assigning all the payments to the Bureau to the

construction company. This notwithstanding, the Bureau with approval of the bank, conditioned however that they should be for labor and materials, made three payments to the company. The last request was denied by the bank, averring that the account was long overdue, the remaining balance of the contract price should be applied to the loan.

The company abandoned the work and as consequence, the Bureau rescinded the contract and assumed the work. Later on, the appellants wrote to the PNB that since the latter has authorized payments to the company instead of on account of the loan guaranteed by the mortgage, there was a change in the conditions of the contract without the knowledge of appellants, which entitled the latter to cancel the mortgage contract. The trial court held them still liable together with their co-makers. It has also been held that if the judgment is not satisfied within a period of time, the mortgaged properties would be foreclosed and sold in public auction. In their appeal, 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 liabilities on the contract of suretyship. HELD:

There is 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 at the time of payment of such obligation was temporarily deferred by the PNB without their knowledge and consent. There has to be another basis for their claim of having been freed from their obligation. It has to be determined if PNB was a holder for value.

A holder for value is one who meets the requirement of being a holder in due course except the notice for want of consideration. In the case at bar, PNB may not be considered as a holder for value. Not only was PNB an immediate party or privy to the promissory note, knowing fully well that petitioners only signed as accommodation parties, but more importantly it was the Deed of Assignment which moved the petitioners to sign the promissory note. Petitioners also relied on the belief that there will be no alterations to the terms of the agreement. The deed provided that there will no further conditions which could possibly alter the agreement without

the consent of the petitioner such as the grant of greater priority to obligations other than the payment of the loan. This notwithstanding, the bank approved the release of payments to the Company instead of the same to the bank. This was in violation of the deed of assignment and prejudiced the rights of petitioners. The bank was not in good faith—a requisite for a holder to be one in due course.

84 STELCO MARKETING V. CA 210 SCRA 51

FACTS:

Petitioner was engaged in the distribution and sale of structiural steel bars. RYL bought on several occasion large quantities of steel bars but the same were never paid for despite several demands by petitioner.

On a relevant date, RYL gave to Armstrong Industries a check in payment of its obligations. The check was drawn by Steelweld Corporation— allegedly the owner of RYL persuaded the president of Steelweld to accommodate the former in its obligation. The check, when deposited was thereafter dishonored due to insufficient funds. A case ensued for violations of BP22 but the case was dismissed as the check was held to be for accommodation purposes only.

Thereafter a complaint was filed by petitioner against RYL and Steelweld for the recovery of sum of money in payment of the steel bars ordered. RYL was nowhere to be found that is why the proceedings commenced as against Steelweld only. The trial court decided in favor of petitioner but this was reversed by the CA.

HELD:

Petitioner contends that the acquittal of Lim and Tianson didn't operate to release Steelweld from its liability as an accommodation party. Noteworthy is that neither said pronouncement nor any other part of the judgment of acquittal declared it liable to petitioner. To be sure, as regards an accommodation party, the condition of lack of notice of any infirmity or defect in title of the persons negotiating it is of no application since the law preserves the right of recourse of a holder for value against an accommodation party notwithstanding knowledge that at the time of taking the instrument, knew him only as an accommodation party.

Further, there is no evidence to show that petitioner possessed the check before the instrument’s presentment and dishonor. In what transpired during the transactions involving the check, evidence and facts show that there was any participation or intervention on the part of petitioner. What

the record shows is that only after the check was deposited and dishonored, petitioner came into possession of it in some way and was able to give it in evidence at the trial of the civil case it has instituted against the drawers of the check.

85 ANG TIONG V. TING 22 SCRA 713 FACTS:

Ting issued a PBCom check payable to cash or bearer. This was indorsed by Ang at the back and it was received by plaintiff. Upon encashment of the check, the same was dishonored. Plaintiff moved that the two make good the value of the check but despite demands, he was unheeded, prompting him to file a complaint. The trial court decided in his favor. HELD:

Even on the assumption that the appellant was an accommodation indorser, as he professes to be, he is nevertheless by the clear mandate of section 29, liable on the instrument to a holder for value, notwithstanding that such holder at the time of taking the instrument knew him to be an accommodation party. And assuming that he was an accommodation party, he may obtain security from the maker to protect himself against the danger of insolvency of the latter but this doesn't affect his liability to the appellee, as the said remedy is a matter of recourse between him and the maker.

86 SADAYA V. SEVILLA 19 SCRA 924 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 creditor’s 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.

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 former’s 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 maker—who made payment—has 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.

87 AGRO CONGLOMERATES V. SORIANO

348 SCRA 450