INTESTATE ESTATE OF VICTOR SEVILLA. SIMEON SADAYA vs.

FRANCISCO
SEVILLA
G.R. No. L-17845, April 27, 1967
Sanchez, J.

Facts:
Sadaya, Sevilla and Varona executed jointly or severally a promissory note worth
P15,000 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 the remaining balance and interest of P5,416.12 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.
 
Issue:
Should the administrator pay half of what Sadaya paid to the bank using any available
funds belonging to the estate of the deceased Sevilla?

HELD:
NO, Sadaya did not have the right to demand payment from his co-accomodator
when the bank had made no judicial demand and Varona had not been proven insolvent.

Sadaya could have sought reimbursement from Varona as the latter was the only one who
received value for the note executed. 

The court postulated the following rules regarding collection from a co-accommodation
party:
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 he made the payment by virtue of a judicial
demand and principal debtor is insolvent.
The bank did not make a judicial demand and nothing shows that Varona was insolvent.
Thus, Sadaya cannot proceed against Sevilla for reimbursement.