Crisologo- Jose vs.

CA
The president of Movers Enterprises, to accommodate its clients Spouses Ong, issued a check in favor of petitioner Crisologo-Jose. This was in consideration of a quitclaim by petitioner over a As the parcel of land, which the GSIS agreed to sell to spouses Ong, with the understanding that upon approval of the compromise agreement, the check will be encashed accordingly. replaced with another one for the same value. violation of BP22. compromise agreement wasn't approved during the expected period of time, the aforesaid check was Upon deposit though of the checks by petitioner, it was dishonored. This prompted the petitioner to file a case against Atty. Bernares and Santos for Meanwhile, during the preliminary investigation, Santos tried to tender a cashiers check for the value of the dishonored check but petitioner refused to accept such. This was consigned by Santos with the clerk of court and he instituted charges against petitioner. The trial court held that consignation wasn't applicable to the case at bar but was reversed by the CA.

HELD:
Petitioner averred that it is not Santos who is the accommodation party to the instrument but the corporation itself. But assuming arguendo that the corporation is the accommodation party, it cannot be held liable to the check issued in favor of petitioner. The rule on accommodation party doesn't include or apply to corporations which are accommodation parties. This is because the issue or indorsement 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 the 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. 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 party only is specifically authorized to do so. Corollarily, corporate officers have no power to execute for mere accommodation a negotiable instrument of the corporation for their individual debts and transactions arising from or in relation to matters in which the corporation has no legitimate concern. Since such accommodation paper cannot be enforced against the corporation, the signatories thereof shall be personally liable therefore, as well as the consequences arising from their acts in connection therewith.

Sadaya vs. Sevilla

G.R. No. L-17845 April 27, 1967

Lessons Applicable: Consideration and Accommodation Party (Negotiable Instruments)

FACTS: March 28, 1949: Victor Sevilla, Oscar Varona and Simeon Sadaya executed, jointly and severally, in favor of the BPI, or its order, a promissory note for P15,000.00 with interest at 8% per annum, payable on demand. The P15,000.00 proceeds was received by Oscar Varona alone. Victor Sevilla and Simeon Sadaya signed the promissory note as co-makers only as a favor to Oscar Varona. June 15, 1950: outstanding balance is P4,850.00. No payment thereafter made. Oct 16 1952: bank collected from Sadaya total of P5,416.12(w/ int) Varona failed to reimburse Sadaya despite repeated demands. V Victor Sevilla died Francisco Sevilla was named administrator. Sadaya filed a creditor's claim for the above sum of P5,746.12, plus attorneys fees in the sum of P1,500.00 The administrator resisted the claim upon the averment that the deceased Victor Sevilla "did not receive any amount as consideration for the promissory note," but signed it only "as surety for Oscar Varona June 5, 1957: Trial court order the administrator to pay CA reversed. ISSUE: W/N Sadaya can claim against the estate of Sevilla as co-accomodation party when Verona as principal debtor is not yet insolvent

HELD: NO. Affirmed Varona is bound by the obligation to reimburse Sadaya

solidary accommodation maker who made payment has the right to contribution, from his co-accommodation maker, in the absence of agreement to the contrary between them, and subject to conditions imposed by law requisites before one accommodation maker can seek reimbursement from a coaccommodation maker. ART. 2073. When there are two or more guarantors of the same debtor and for the same debt, the one among them who has paid may demand of each of the others the share which is proportionally owing from him. If any of the guarantors should be insolvent, his share shall be borne by the others, including the payer, in the same proportion. (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, or -no judicial demand just voluntarily (b) a principal debtor is insolvent. - Varona is not insolvent

Travel-On vs. CA
Travel-On, Inc. vs Court of Appeals G.R. No. L-56169 June 26, 1992 -accommodation party FACTS: Petitioner Travel-On Inc. is a travel agency from which Arturo Miranda procured tickets on behalf of airline passengers and derived commissions therefrom. Miranda was sued by petitioner to collect on the six postdated checks he issued which were all dishonored by the drawee banks. Miranda, however, 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 not for the purpose of encashment to pay his indebtedness but for purposes of accommodation, as he had in the past accorded similar favors to petitioner. Petitioner however urges that the postdated checks are per se evidence of liability on the part of private respondent and further argues that even

assuming that the checks were for accommodation, private respondent is still liable thereunder considering that petitioner is a holder for value. ISSUE: Whether Miranda is liable on the postdated checks he issued even assuming that said checks were issued for accommodation only. RULING: There was no accommodation transaction in the case at bar. In accommodation transactions recognized by the Negotiable Instruments Law, an accommodating party lends his credit to the accommodated party, by issuing or indorsing a check which is held by a payee or indorsee as a holder in due course, who gave full value therefor to the accommodated 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. In the case at bar, TravelOn was payee of all six (6) checks, it presented these checks for payment at the drawee bank but the checks bounced. 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. **In accommodation transactions recognized by the Negotiable Instruments Law, an accommodating party lends his credit to the accommodated party, by issuing or indorsing a check which is held by a payee or indorsee as a holder in due course, who gave full value therefor to the accommodated party. In the case at bar, Travel-On was the payee of all six (6) checks, it presented these checks for payment at the drawee bank but the checks bounced. Travel-On obviously was not an accommodated party; it realized no value on the checks which bounced.