Case No # 4 & 7
TOI’s witness, Elita Montilla, on the other hand, explained that the
Travel-On Inc. vs CA
26 Jan 1992 | G.R. No. 56169 | Consideration: BOF
Petitioners: Travel-On Inc. (TOI)
Respondent: CA & Arturo S. Miranda
DOCTRINE:
For Sec 24: Checks are prima facie evidence that there is a consideration
For Sec 29:
FACTS:
1. TOI is a travel agency selling airline tickets on commission basis for and on
behalf of different airline companies. Private respondent Arturo S. Miranda
had a revolving credit line with TOI. He procured tickets from petitioner on
behalf of airline passengers and derived commissions therefrom.
2. 14 June 1972: TOI filed suit before the CFI of Manila to collect on 6 checks
issued by Miranda with a total face amount of P115k
3. [Pets Contention] TOI with prayer of Prel. Inj. averred that from 5 August
1969 to 16 January 1970, they sold and delivered various airline tickets to
Miranda at a total price of P278,201.57; that to settle said account, Miranda
paid various amounts in cash and in kind, and thereafter issued 6
postdated checks amounting to P115k which were all dishonored by the
drawee banks. Travel-On further alleged that in March 1972, private
respondent made another payment of P10k reducing his indebtedness to
P105k. The writ of attachment was granted by the CFI.
4. [Resp. Side] Miranda admitted having had transactions with Travel-On
during the period stipulated in the complaint. However, he claimed that he
had already fully paid and even overpaid his obligations and that refunds were
in fact due to him. He argued that he had issued the postdated checks for
purposes of accommodation, as he had in the past accorded similar favors to
TOI. During the proceedings, private respondent contested several tickets
alleged to have been erroneously debited to his account. He claimed
reimbursement of his alleged overpayments, plus litigation expenses, and
exemplary and moral damages by reason of the allegedly improper
attachment of his properties.
5. In support of his theory that the checks were issued for accommodation,
Miranda testified that he had issued the checks in the name of TOIn in order
that its General Manager, Elita Montilla, could show to TOI’s Board of
Directors that the accounts receivable of the company were still good. He
further stated that Elita Montilla tried to encash the same, but that these were
dishonored and were subsequently returned to him after the accommodation
purpose had been attained.
6.
"accommodation" extended to TOI by Miranda related to situations where
one or more of its passengers needed money in Hongkong, and upon
request of TOI, Miranda would contact his friends in Hongkong to
advance Hongkong money to the passenger. The passenger then paid TOI
upon his return to Manila and which payment would be credited by TOI to
Miranda’s running account with it.
7. 31 Jan 1975: the court a quo ordered TOI to pay Miranda P8,894.91
representing net overpayments by Miranda, moral damages of P10,000.00 for
the wrongful issuance of the writ of attachment and for the filing of this case,
P5,000.00 for attorney's fees and the costs of the suit.
8. The trial court ruled that private respondent's indebtedness to petitioner was
not satisfactorily established and that the postdated checks were issued not
for the purpose of encashment to pay his indebtedness but to
accommodate the General Manager of Travel-On to enable her to show
to the Board of Directors that Travel-On was financially stable. MR
denied award of moral damages increased to 50k
9. CA affirmed, but reduced moral damages to P20k, with interest at the legal
rate from the date of the filing of the Answer on 28 August 1972. MR denied.
ISSUE:
1. W/N the lower courts erred in relying on the financial statements of TOI as
proof of Miranda's indebtedness= YES
2. W/N Miranda is liable for the 6 dishonored checks because there was no
accommodation= YES
HELD:
[FIRST ISSUE]
1. Reliance by courts a quo on the company’s financial statements were
wrong, to see if Miranda was liable or not. This 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. Thus, the mere introduction of the
instrument sued on in evidence prima facie entitles the plaintiff to recovery.
Miranda was unable to relieve himself of this burden.
2. the CA mistakenly placed the burden of proving the existence of valuable
consideration upon petitioner. This cannot be countenanced; it was up to
private respondent to show that he had indeed issued the checks without
sufficient consideration. 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 weren’t issued for any valuable
consideration.
[SECOND ISSUE] Travel-On, which incidentally involved receipt of full consideration
1. While the NIL does refer to accommodation transactions, no such transaction by private respondent.
was here shown
2. Sec. 29. Liability of accommodation party. — An accommodation party is DISPOSITIVE:
one who has signed the instrument as maker, drawer, acceptor, or indorser, ACCORDINGLY, the Court Resolved to GRANT due course to the Petition for
without receiving value therefor, and for the purpose of lending his name to Review on Certiorari and to REVERSE and SET ASIDE the Decision dated 22
some other person. Such a person is liable on the instrument to a holder for October 1980 and the Resolution of 23 January 1981 of the Court of Appeals, as well
value, notwithstanding such holder, at the time of taking the instrument, knew as the Decision dated 31 January 1975 of the trial court, and to enter a new decision
him to be only an accommodation party. requiring private respondent Arturo S. Miranda to pay to petitioner Travel-On the
3. In accommodation transactions recognized by the Negotiable Instruments amount of P105,000.00 With legal interest thereon from 14 June 1972, plus ten percent
Law, an accommodating party lends his credit to the accommodated party, (10%) of the total amount due as attorney's fees. Costs against private respondent.|||
by issuing or indorsing a check which is held by a payee or indorsee as a (Travel-On, Inc. v. Court of Appeals, G.R. No. 56169 (Resolution), [June 26, 1992],
holder in due course, who gave full value therefor to the accommodated 285 PHIL 844-854)
party. The latter, in other words, receives or realizes full value which the
accommodated party then must repay to the accommodating party. But the
accommodating party is bound on the check to the holder in due course who
is necessarily a third party and is not the accommodated party.
1. In the case at bar, Travel-On was payee of all six (6) checks, it
presented these checks for payment at the drawee bank but the
checks bounced.
2. Travel-On obviously was not an accommodated party; it realized no
value on the checks which bounced. Miranda must be held liable on
the checks involved as petitioner is entitled to the benefit of the
statutory presumption that it was a holder in due course and that the
checks were supported by valuable consideration.
4. Travel-On was entitled to the benefit of the statutory presumption that it was
a holder in due course, that the checks were supported by valuable
consideration. Private respondent maker of the checks did not successfully
rebut these presumptions. The only evidence aliunde that private respondent
offered was his own self-serving uncorroborated testimony.
1. He claimed that he had issued the checks to Travel-On as payee to
"accommodate" its General Manager who allegedly wished to show
those checks to the Board of Directors of Travel-On to "prove" that
Travel-On's account receivables were somehow "still good."
2. It will be seen that this claim was in fact a claim that the checks were
merely simulated, that private respondent did not intend to bind
himself thereon. Only evidence of the clearest and most convincing
kind will suffice for that purpose; no such evidence was submitted
by private respondent.
3. The latter's explanation was denied by Travel-On's General
Manager; that explanation, in any case, appears merely contrived
and quite hollow to us. Upon the other hand, the "accommodation"
or assistance extended to Travel-On's passengers abroad as testified
by petitioner's General Manager involved, not the accommodation
transactions recognized by the NIL, but rather the circumvention of
then existing foreign exchange regulations by passengers booked by
 Aglibot v. Santia (RV)
December 05, 2012 | G.R. No. 185945 | Sec. 29 Accomodation Party
PETITIONER: Fideliza J. Aglibot
RESPONDENT: Ingresol L. Santia
DOCTRINE:
(1) By issuing personal checks, one binds himself personally and solidarily, and not
merely as a guarantee.
(2) The relation between an accommodation party and the party accommodated is,
in effect, one of principal and surety — the accommodation party being the surety,
bound principally. The liability is immediate and direct.
FACTS:
1. Engr. Ingersol L. Santia (Santia) loaned the amount of ₱2,500,000.00 to
Pacific Lending & Capital Corporation (PLCC), through its Manager,
petitioner Fideliza J. Aglibot (Aglibot).
1. The loan was evidenced by a Promissory Note dated July 1,
2003, issued by Aglibot in behalf of PLCC, payable in one year
subject to interest at 24% per annum.
2. Allegedly as a guaranty or security for the payment of the note,
Aglibot also issued and delivered to Santia eleven (11) post-dated
personal checks drawn from her own demand account maintained at
Metrobank. Aglibot is a major stockholder of PLCC.
2. Upon presentment of the aforesaid checks for payment, they were dishonored
by the bank for having been drawn against insufficient funds or closed
account. Santia thus demanded payment from PLCC and Aglibot of the
face value of the checks, but neither of them heeded his demand.
3. Consequently, 11 Informations for violation of B.P. 22 were filed against
Aglibot before the MTCC, Dagupan City.
4. Aglibot, in her counter-affidavit, admitted that she did obtain a loan from
Santia, but claimed that she did so in behalf of PLCC.
5. Aglibot contended that before granting the loan, the checks are only meant
for security of repayment of the loans, with the understanding that upon
remittance in cash of the amount of the checks, Santia would return to her
each check paid.
6. However, despite having already paid the checks, Santia refused to return
them to Aglibot, although he gave her assurance that he would not deposit
them. Santia deposited her checks, resulting in their dishonor.
7. MTCC: Acquitted Aglibot.
8. RTC: absolved Aglibot and dismissing the civil aspect of the case on the
ground of “failure to fulfill a condition precedent of exhausting all means to
collect from the principal debtor.”
9. CA: Reversed. Aglibot is personally liable for the loan.
Hence, this petition by Aglibot.
12. Aglibot maintains that it was error to adjudge her personally liable for issuing
her own (11) post-dated checks to Santia, since she did so in behalf of her employer,
PLCC, the true borrower and beneficiary of the loan.
13. Maintaining that she was a mere guarantor of the said debt of PLCC, she
insists that Santia failed to exhaust all means to collect the debt from PLCC, the
principal debtor, and therefore he cannot now be permitted to go after her subsidiary
liability (Art. 2058 NCC).
ISSUE:
W/N Aglibot is personally liable for the repayment of the loan, and therefore
consequently, liable for violations of BP Blg. 22.
RULING: Yes, Aglibot is an accommodation party and therefore liable to Santia.
RATIO:
(1) Aglibot is an accommodation party and therefore liable to Santia
• By issuing her own post-dated checks, Aglibot thereby bound herself
personally and solidarily to pay Santia, and dismissed her claim that she
issued her said checks in her official capacity as PLCC’s manager merely to
guarantee the investment of Santia.
• It noted that she could have issued PLCC’s checks, but instead she chose to
issue her own checks, drawn against her personal account with Metrobank.
• She is what the Negotiable Instruments Law calls an accommodation party,
whose liability was laid out by Sec. 29 of NIL:
o “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.”
The relation between an accommodation party and the party accommodated is,
in effect, one of principal and surety — the accommodation party being the
surety.
It is a settled rule that a surety is bound equally and absolutely with the principal
and is deemed an original promisor and debtor from the beginning. The liability
is immediate and direct.
It is not a valid defense that the accommodation party did not receive any valuable
consideration when he executed the instrument; nor is it correct to say that the holder
for value is not a holder in due course merely because at the time he acquired the
instrument, he knew that the indorser was only an accommodation party.
The mere fact, then, that Aglibot issued her own checks to Santia made her
personally liable to the latter on her checks without the need for Santia to first go
after PLCC for the payment of its loan.
DISPOSITIVE: WHEREFORE, the Petition is DENIED and the Decision of the CA
is hereby AFFIRMED.
Note:
The Court rejected Aglibot’s claim as a mere guarantor of the indebtedness of PLCC
to Santia for want of proof, in view of Article 1403(2) of the Civil Code, embodying
the Statute of Frauds, which provides:
Art. 1403. The following contracts are unenforceable, unless they are ratified: x x x
(2) Those that do not comply with the Statute of Frauds as set forth in this number. In
the following cases an agreement hereafter made shall be unenforceable by action…:
Ang v. Associated Bank
September 5, 2007|146511| Sec. 29
Petitioners: Tomas Ang
Respondent: Associated Bank and Antonio Ang
DOCTRINE: The accommodation party is liable on the instrument to a holder for
value even though the holder, at the time of taking the instrument, knew him or her
to be merely an accommodation party, as if the contract was not for accommodation.
Requisites of 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;
(3) he must sign for the purpose of lending his name or credit to some other person.
Sec. 29. 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.
FACTS:
1. Tomas Ang and Antonio Ang obtained loans from the Respondent Bank via two
promissory notes, one amounting to P50,000 while the other was P30, 000. The
loan had the following stipulations: 14% interest rate per annum, 2% service
charge per annum, and 1% penalty charge per month due date until fully paid.
2. Despite repeated demands, both were unable to pay.
3. The Petitioner alleged that the bank knew he did not receive any valuable
consideration for affixing his signature in the notes and he only lent his name as
an accommodation party. However, the bank claimed this is immaterial as he is
solidary debtor.
4. The Petitioner argued further that he accepted the promissory notes in blank noting
that Antonio Ang said the latter would only borrow P30, 000. His second signature
was secured through fraudulent means because Antonio Ang said the first
promissory note/loan did not push through.
5. The RTC ruled in favour Tomas Ang on the grounds that,
“Based then on the evidence presented by the defendant Tomas Ang, it would
readily appear that at the time this suit for Sum of Money was led which was on
August [28], 1990, the notes were held by the Asset Privatization Trust by virtue
of the Deeds of Transfer and Trust Agreement, which was empowered to bring
suit to enforce payment of the obligations. Consequently, defendant Tomas Ang
has sufficiently established that plaintiff at the time this suit was led was not the
holder of the notes to warrant the dismissal of the complaint.”
6. The CA reversed the ruling of the RTC on the grounds that, “With the bank as
the "holder" of the promissory notes, the Court of Appeals held that Tomas
Ang is accountable therefor in his capacity as an accommodation party.
Citing Sec. 29 of the NIL, he is liable to the bank in spite of the latter's
knowledge, at the time of taking the notes, that he is only an accommodation
party. Moreover, as a comaker who agreed to be jointly and severally liable on
the promissory notes, Tomas Ang cannot validly set up the defense that he did not
receive any consideration therefor as the fact that the loan was granted to the
principal debtor already constitutes a sufficient consideration.”
ISSUE: WON Ang is liable for the debt posited by the default of payment of the
promissory notes despite being an accommodation party. YES
HELD: YES, Ang is jointly and severally liable on the promissory notes.
2. The fact that petitioner stands only as a surety in relation to Antonio Ang Eng
Liong is immaterial to the claim of the bank and does not a whit diminish nor
defeat the rights of the latter as a holder for value. To sanction his theory is to give
unwarranted legal recognition to the patent absurdity of a situation where a co-
maker, when sued on an instrument by a holder in due course and for value, can
escape liability by the convenient expedient of interposing the defense that he is
a merely an accommodation party.
3. Consequently, in issuing the two promissory notes, petitioner as accommodating
party warranted to the holder in due course that he would pay the same according
to its tenor. Since the liability of an accommodation party remains not only
primary but also unconditional to a holder for value, 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.
DISPOSITIVE:
WHEREFORE, WHEREFORE, the October 9, 2000 Decision and December 26, 2000
Resolution of the Court of Appeals in CA-G.R. CV No. 53413 are AFFIRMED. The
petition is DENIED for lack of merit.