Negotiable Instruments Case Digest: Travel-On v.

CA (1992)
G.R. No. L-56169 June 26, 1992
Lessons Applicable: Consideration and Accomodation Party (Negotiable
Instruments)
FACTS:

Arturo S. Miranda had a revolving credit line with Travel-On. Inc. (TravelOn), a travel agency selling airline tickets on commission basis for and in behalf of
different airline companies procured tickets from Travel-On on behalf of airline
passengers and derived commissions therefrom.

June 14 1972: Travel-On filed bef. the CFI to collect 6 checks issued by
Miranda totaling P115,000.00

August 5 1969 - January 16 1970: Travel-On sold and delivered airline

tickets to Miranda w/ total price of P278,201.57
o
paid in cash and 6 checks = P115,000 - all dishonored by the drawee
banks
o
March 1972: paid P10,000.00 reducing his debts to P105,000

Miranda: checks were issued for to "accommodate" Travel-On's General

Manager to show the BOD of Travel-On that their receivables were still good
o
Travel-On's witness, Elita Montilla: related to situations where its
passengers needed money in Hongkong, and upon request of Travel-On, Miranda
would contact his friends in Hongkong to advance Hongkong money to the passenger

CA affirmed CFI: ordered Travel-On to pay Miranda P8,894.91 representing

net overpayments by private respondent, moral damages of P10,000.00 (later
increased to P50,000 by CFI and reduced by CA to P20,000) 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 - decision was because Travel-On did not show
that Miranda had an outstanding balance of P115,000.00
ISSUE: W/N Miranda is liable for the 6 dishonored checks because there was no
accomodation
HELD:

YES. GRANT due course to the Petition for Review on Certiorari and to
REVERSE and SET ASIDE the Decision of the CA and trial court
failed to give due importance the checks themselves as evidence of the debt
check which is regular on its face is deemed prima facie to have
been issued for a valuable consideration and every person whose signature appears
thereon is deemed to have become a party thereto for value.

negotiable instrument is presumed to have been given or indorsed

for a sufficient consideration unless otherwise contradicted and overcome by other
competent evidence
o
Those checks in themselves constituted evidence of indebtedness of
Miranda, evidence not successfully overturned or rebutted by private respondent.

While the Negotiable Instruments Law does refer to accommodation

transactions, no such transaction was here shown
o
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.
o
Having issued or indorsed the check, the accommodating party has
warranted to the holder in due course that he will pay the same according to its tenor.
o
Travel-On obviously was not an accommodated party; it realized no
value on the checks which bounced.

Negotiable Instruments Case Digest: Maulini v. Serrano (1914)

G.R.
No.
L-8844
December
16,
1914
Lessons Applicable: Consideration and Accommodation Party (Negotiable
Instruments)

promissory note: 3,000. Due 5th of September, 1912.

We jointly and severally agree to pay to the order of Don Antonio G.

Serrano on or before the 5th day of September, 1912, the sum of three thousand pesos
(P3,000) for value received for commercial operations. Notice and protest renounced.
If the sum herein mentioned is not completely paid on the 5th day of September, 1912,
this instrument will draw interest at the rate of 1 per cent per month from the date
when due until the date of its complete payment. The makers hereof agree to pay the
additional sum of P500 as attorney's fees in case of failure to pay the note.
Manila,
June
5,
1912.
(Sgd.) For Padern, Moreno & Co., by F. Moreno, member of the firm. For Jose Padern,
by F. Moreno. Angel Gimenez.

The note was indorsed on the back as follows:

Pay note to the order of Don Fernando Maulini, value received. Manila, June 5, 1912.
(Sgd.) A.G. Serrano.

Maulini's business as a broker consisted in looking up and ascertaining

persons who had money to loan as well as those who desired to borrow money and,
acting as a mediary, negotiate a loan between the two
o
Method usually followed: the broker delivered the money
personally to the borrower, took note in his own name and immediately transferred it
by indorsement to the lender
o
done at the special request of the indorsee and simply as a favor to
him, the latter stating to the broker that he did not wish his name to appear on the
books of the borrowing company as a lender of money and that he desired that the
broker take the note in his own name, immediately transferring to him title thereto by
indorsement

Trial Court: immaterial whether there was a consideration for the transfer or
not, as the indorser, under the evidence offered, was an accommodation indorser.
ISSUES:

W/N

Serrano

HELD: Judgment reversed.

was

an

accomodation

never was a moment when Serrano was the real owner of the note

The only payment that the broker received was for his services in
negotiating the loan.

In cases of accommodation indorsement the indorser makes the

indorsement for the accommodation of the maker. Such an indorsement is generally
for the purpose of better securing the payment of the note
o
lend his name to the maker, NOT to the holder

FACTS:

indorser

indorsement is made as a favor to the indorsee, who requests it, not the
better to secure payment, but to relieve himself from a distasteful situation, and
where the only consideration for such indorsement passes from the indorser to the
indorsee, the situation does not present one creating an accommodation indorsement,
nor one where there is a consideration sufficient to sustain an action on the
indorsement.

Parol evidence was admissible for the purpose named.

Negotiable Instruments Case Digest: Sadaya v. Sevilla (1967)

G.R. No. L-17845
April 27, 1967
Lessons
Applicable:
Consideration
and Accommodation Party
(Negotiable Instruments)

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.
o
The P15,000.00 proceeds was received by Oscar Varona alone.

Victor Sevilla and Simeon Sadaya signed the promissory note as comakers 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
o
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

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.
o
If any of the guarantors should be insolvent, his share shall be
borne by the others, including the payer, in the same proportion.

FACTS:

requisites before one accommodation maker can seek reimbursement from a

co-accommodation maker.

(1) A joint and several accommodation maker of a negotiable promissory

note may demand from the principal debtor reimbursement for the amount that
hePAID 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
o
(a) he made the payment by virtue of a judicial demand, or -no
judicial demand just voluntarily
o
(b) a principal debtor is insolvent. - Varona is not insolvent