Attempted Robbery

September 7, 2008

PNB vs. Ramon Maza and Francisco Macenas, Negotiable Instrument Digest

GR. No. 24224, Nov. 3, 1925

PNB vs. Ramon Maza and Francisco Macenas 

Facts:

Maza and Mecenas executed promissory notes for the Philippine National Bank.  Upon maturity, the notes were not taken up by the defendants.  For this, PNB instituted an action against the two to recover payments. 

As defense, they raised that they are not real party in interest.  They argued that it was Enrique Echaus who should be liable as they merely filled up the notes upon the request of the latter.  They point to Enrique as the one who negotiated it to PNB, that they never received any value thereof.  Lower court found them jointly and severally liable for the negotiable instrument. 

Issue:

Whether the defendants are liable for the promissory note?

Ruling:

Yes.  Whether they are principals with Enrique their agent or mere accommodation parties, they are still liable.  Under Civil Code 1727, the principals must fulfill their obligations, as makers they must keep their engagement and must pay as promised.  Their liability on the instruments is primary and unconditional. 

If they are accommodation parties, under the law, the defendants as accommodation parties having signed the instrument without receiving value therefore and for the purpose of lending his name to some other persons, are still liable on the instruments.  The law now is that the accommodation party can claim no benefit as such, but he is liable according to the face of his undertaking, the same as if he were himself financially interested in the transaction. 

It maybe properly remarked that when the accommodation parties make payment to the holder of the notes, they have the right to sue the accommodated party for reimbursement, since the relation between them is in effect that of principal and sureties, the accommodation parties being the sureties.  

Town Savings and Loan Bank vs CA, Negotiable Instrument Digest

GR No. 10611, June 17, 1993

Town Savings and Loan Bank vs CA

Facts:

In 1983, the Hipolitos applied for and were granted a loan in the amount of Php 700,000.00 with interest of 24% P.A. for which they executed and delivered to Town Savings Loan Bank a promissory note with maturity period of 3 years and with acceleration clause.  Thy defaulted, subsequently, demand for payment were sent to them.

The Hipolitos denied being personally liable on the Php 700,000.00 promissory note which they executed.  The loan was allegedly for the account of Pilarita H. Reyes, the sister of Miguel Hipolito.  She was the real party-in-interest.  They argued that they are mere guarantors and not as accommodation party, not having received any part of the loan. 

Issue:

Whether or not the Hipolitos are accommodation party?

Ruling: Yes.  Under the Negotiable Instruments Law, 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, not withstanding 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 case at bar, there is no question that the private respondent signed the promissory note in order to enable Pilarita to borrow money from TSLB.  As observed by both the trial and appellate court, the actual beneficiary was Pilarity Reyes and no other.   The Hipolitos accommodated her by signing a promissory note for half of the loan that she applied for because TSLB may not lend any single borrower more than the authorized limit of its loan portfolio.  Under Section 29 of NIL, the Hipolitos are liable to the bank on the promissory note that they signed to accommodate Pilarita.