FIRST DIVISION

[G.R. No. 185945. December 5, 2012.]

FIDELIZA J. AGLIBOT , petitioner, vs . INGERSOL L. SANTIA , respondent.

DECISION

REYES , J : p

Before the Court is a Petition for Review on Certiorari under Rule 45 of the 1997 Rules of
Civil Procedure seeking to annul and set aside the Decision 1 dated March 18, 2008 of the
Court of Appeals (CA) in CA-G.R. SP No. 100021, which reversed the Decision 2 dated April
3, 2007 of the Regional Trial Court (RTC) of Dagupan City, Branch 40, in Criminal Case Nos.
2006-0559-D to 2006-0569-D and entered a new judgment. The fallo reads as follows:
WHEREFORE , the instant petition is GRANTED and the assailed Joint Decision
dated April 3, 2007 of the RTC of Dagupan City, Branch 40, and its Order dated
June 12, 2007 are REVERSED AND SET ASIDE and a new one is entered
ordering private respondent Fideliza J. Aglibot to pay petitioner the total amount
of [P]3,000,000.00 with 12% interest per annum from the filing of the Informations
until the nality of this Decision, the sum of which, inclusive of interest, shall be
subject thereafter to 12% annual interest until fully paid.

SO ORDERED . 3

On December 23, 2008, the appellate court denied herein petitioner's motion for
reconsideration. TADCSE

Antecedent Facts
Private respondent-complainant Engr. Ingersol L. Santia (Santia) loaned the amount of
P2,500,000.00 to Paci c Lending & Capital Corporation (PLCC), through its Manager,
petitioner Fideliza J. Aglibot (Aglibot). 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. 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, Camiling Branch. Aglibot is a
major stockholder of PLCC, with headquarters at 27 Casimiro Townhouse, Casimiro
Avenue, Zapote, Las Piñas, Metro Manila, where most of the stockholders also reside. 4
Upon presentment of the aforesaid checks for payment, they were dishonored by the bank
for having been drawn against insuf cient 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. Consequently, eleven (11) Informations for violation of Batas
Pambansa Bilang 22 (B.P. 22), corresponding to the number of dishonored checks, were
led against Aglibot before the Municipal Trial Court in Cities (MTCC), Dagupan City,
Branch 3, docketed as Criminal Case Nos. 47664 to 47674. Each Information, except as to
the amount, number and date of the checks, and the reason for the dishonor, uniformly
alleged, as follows:
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 That sometime in the month of September, 2003 in the City of Dagupan,
Philippines and within the jurisdiction of this Honorable Court, the above-named
accused, FIDELIZA J. AGLIBOT , did then and there, willfully, unlawfully and
criminally, draw, issue and deliver to one Engr. Ingersol L. Santia, a METROBANK
Check No. 0006766, Camiling Tarlac Branch, postdated November 1, 2003, in the
amount of [P]50,000.00 , Philippine Currency, payable to and in payment of an
obligation with the complainant, although the said accused knew full[y] well that
she did not have suf cient funds in or credit with the said bank for the payment
of such check in full upon its presentment, such [t]hat when the said check was
presented to the drawee bank for payment within ninety (90) days from the date
thereof, the same was dishonored for reason "DAIF", and returned to the
complainant, and despite notice of dishonor, accused failed and/or refused to
pay and/or make good the amount of said check within ve (5) days banking
days [sic], to the damage and prejudice of one Engr. Ingersol L. Santia in the
aforesaid amount of [P]50,000.00 and other consequential damages. 5 CcEHaI

Aglibot, in her counter-af davit, admitted that she did obtain a loan from Santia, but
claimed that she did so in behalf of PLCC; that before granting the loan, Santia demanded
and obtained from her a security for the repayment thereof in the form of the aforesaid
checks, but with the understanding that upon remittance in cash of the face amount of the
checks, Santia would correspondingly return to her each check so paid; but despite having
already paid the said checks, Santia refused to return them to her, although he gave her
assurance that he would not deposit them; that in breach of his promise, Santia deposited
her checks, resulting in their dishonor; that she did not receive any notice of dishonor of
the checks; that for want of notice, she could not be held criminally liable under B.P. 22
over the said checks; and that the reason Santia led the criminal cases against her was
because she refused to agree to his demand for higher interest.
On August 18, 2006, the MTCC in its Joint Decision decreed as follows:
WHEREFORE , in view of the foregoing, the accused, FIDELIZA J. AGLIBOT , is
hereby ACQUITTED of all counts of the crime of violation of the bouncing
checks law on reasonable doubt. However, the said accused is ordered to pay the
private complainant the sum of [P]3,000,000.00 representing the total face
value of the eleven checks plus interest of 12% per annum from the ling of the
cases on November 2, 2004 until fully paid, attorney's fees of [P]30,000.00 as
well as the cost of suit.

SO ORDERED. 6

On appeal, the RTC rendered a Decision dated April 3, 2007 in Criminal Case Nos. 2006-
0559-D to 2006-0569-D, which further absolved Aglibot of any civil liability towards Santia,
to wit: aEACcS

WHEREFORE, premises considered, the Joint Decision of the court a quo

regarding the civil aspect of these cases is reversed and set aside and a new one
is entered dismissing the said civil aspect on the ground of failure to ful ll, a
condition precedent of exhausting all means to collect from the principal debtor.

SO ORDERED. 7

Santia's motion for reconsideration was denied in the RTC's Order dated June 12, 2007. 8
On petition for review to the CA docketed as CA-G.R. SP No. 100021, Santia interposed the
following assignment of errors, to wit:

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 "In brushing aside the law and jurisprudence on the matter, the Regional Trial
Court seriously erred:
1. In reversing the joint decision of the trial court by dismissing the civil
aspect of these cases;
2. In concluding that it is the Paci c Lending and Capital Corporation
and not the private respondent which is principally responsible for
the amount of the checks being claimed by the petitioner;
3. In nding that the petitioner failed to exhaust all available legal
remedies against the principal debtor Paci c Lending and Capital
Corporation;
4. In finding that the private respondent is a mere guarantor and not an
accommodation party, and thus, cannot be compelled to pay the
petitioner unless all legal remedies against the Paci c Lending and
Capital Corporation have been exhausted by the petitioner;
5. In denying the motion for reconsideration led by the petitioner." 9
ASEcHI

In its now assailed decision, the appellate court rejected the RTC's dismissal of the civil
aspect of the aforesaid B.P. 22 cases based on the ground it cited, which is that the
"failure to ful ll a condition precedent of exhausting all means to collect from the principal
debtor." The appellate court held that since Aglibot's acquittal by the MTCC in Criminal
Case Nos. 47664 to 47674 was upon a reasonable doubt 1 0 on whether the prosecution
was able to satisfactorily establish that she did receive a notice of dishonor, a requisite to
hold her criminally liable under B.P. 22, her acquittal did not operate to bar Santia's
recovery of civil indemnity.
It is axiomatic that the "extinction of penal action does not carry with it the
eradication of civil liability, unless the extinction proceeds from a declaration in
the nal judgment that the fact from which the civil liability might arise did not
exist. Acquittal will not bar a civil action in the following cases: (1) where the
acquittal is based on reasonable doubt as only preponderance of evidence is
required in civil cases; (2) where the court declared the accused's liability is not
criminal but only civil in nature[;] and (3) where the civil liability does not arise
from or is not based upon the criminal act of which the accused was acquitted."
1 1 (Citation omitted)

The CA therefore ordered Aglibot to personally pay Santia P3,000,000.00 with interest at
12% per annum, from the ling of the Informations until the nality of its decision.
Thereafter, the sum due, to be compounded with the accrued interest, will in turn be
subject to annual interest of 12% from the nality of its judgment until full payment. It thus
modi ed the MTCC judgment, which simply imposed a straight interest of 12% per annum
from the ling of the cases on November 2, 2004 until the P3,000,000.00 due is fully paid,
plus attorney's fees of P30,000.00 and the costs of the suit.
Issue
Now before the Court, Aglibot maintains that it was error for the appellate court to adjudge
her personally liable for issuing her own eleven (11) post-dated checks to Santia, since she
did so in behalf of her employer, PLCC, the true borrower and bene ciary of the loan. Still
maintaining that she was a mere guarantor of the said debt of PLCC when she agreed to
issue her own checks, Aglibot 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
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 after her subsidiary liability.
Ruling of the Court
The petition is bereft of merit.
Aglibot cannot invoke the benefit of
excussion
The RTC in its decision held that, "It is obvious, from the face of the Promissory Note . . .
that the accused-appellant signed the same on behalf of PLCC as Manager thereof and
nowhere does it appear therein that she signed as an accommodation party." 1 2 The RTC
further ruled that what Aglibot agreed to do by issuing her personal checks was merely to
guarantee the indebtedness of PLCC. So now petitioner Aglibot reasserts that as a
guarantor she must be accorded the bene t of excussion — prior exhaustion of the
property of the debtor — as provided under Article 2058 of the Civil Code, to wit: SCEHaD

Art. 2058. The guarantor cannot be compelled to pay the creditor unless the
latter has exhausted all the property of the debtor, and has resorted to all the
legal remedies against the debtor.

It is settled that the liability of the guarantor is only subsidiary, and all the properties of the
principal debtor, the PLCC in this case, must rst be exhausted before the guarantor may
be held answerable for the debt. 1 3 Thus, the creditor may hold the guarantor liable only
after judgment has been obtained against the principal debtor and the latter is unable to
pay, "for obviously the 'exhaustion of the principal's property' — the bene t of which the
guarantor claims — cannot even begin to take place before judgment has been obtained."
1 4 This rule is contained in Article 2062 1 5 of the Civil Code, which provides that the action
brought by the creditor must be led against the principal debtor alone, except in some
instances mentioned in Article 2059 1 6 when the action may be brought against both the
guarantor and the principal debtor.
The Court must, however, reject 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:
xxx xxx xxx
(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, unless the same, or some note or memorandum thereof,
be in writing, and subscribed by the party charged, or by his agent; evidence,
therefore, of the agreement cannot be received without the writing, or a secondary
evidence of its contents: SDTcAH

a) An agreement that by its terms is not to be performed within a year

from the making thereof;
b) A special promise to answer for the debt, default, or miscarriage of
another;
c) An agreement made in consideration of marriage, other than a
mutual promise to marry;

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 d) An agreement for the sale of goods, chattels or things in action, at a
price not less than ve hundred pesos, unless the buyer accept and
receive part of such goods and chattels, or the evidences, or some
of them, or such things in action, or pay at the time some part of the
purchase money; but when a sale is made by auction and entry is
made by the auctioneer in his sales book, at the time of the sale, of
the amount and kind of property sold, terms of sale, price, names of
purchasers and person on whose account the sale is made, it is a
sufficient memorandum;
e) An agreement for the leasing of a longer period than one year, or for
the sale of real property or of an interest therein;
f) A representation to the credit of a third person. (Italics ours)

Under the above provision, concerning a guaranty agreement, which is a promise to answer
for the debt or default of another, 1 7 the law clearly requires that it, or some note or
memorandum thereof, be in writing. Otherwise, it would be unenforceable unless rati ed,
1 8 although under Article 1358 1 9 of the Civil Code, a contract of guaranty does not have to
appear in a public document. 2 0 Contracts are generally obligatory in whatever form they
may have been entered into, provided all the essential requisites for their validity are
present, and the Statute of Frauds simply provides the method by which the contracts
enumerated in Article 1403 (2) may be proved, but it does not declare them invalid just
because they are not reduced to writing. Thus, the form required under the Statute is for
convenience or evidentiary purposes only. 2 1
On the other hand, Article 2055 of the Civil Code also provides that a guaranty is not
presumed, but must be express, and cannot extend to more than what is stipulated therein.
This is the obvious rationale why a contract of guarantee is unenforceable unless made in
writing or evidenced by some writing. For as pointed out by Santia, Aglibot has not shown
any proof, such as a contract, a secretary's certi cate or a board resolution, nor even a
note or memorandum thereof, whereby it was agreed that she would issue her personal
checks in behalf of the company to guarantee the payment of its debt to Santia. Certainly,
there is nothing shown in the Promissory Note signed by Aglibot herself remotely
containing an agreement between her and PLCC resembling her guaranteeing its debt to
Santia. And neither is there a showing that PLCC thereafter rati ed her act of
"guaranteeing" its indebtedness by issuing her own checks to Santia. caHCSD

Thus did the CA reject the RTC's ruling that Aglibot was a mere guarantor of the
indebtedness of PLCC, and as such could not "be compelled to pay [Santia], unless the
latter has exhausted all the property of PLCC, and has resorted to all the legal remedies
against PLCC . . . ." 2 2
Aglibot is an accommodation party
and therefore liable to Santia
Section 185 of the Negotiable Instruments Law de nes a check as "a bill of exchange
drawn on a bank payable on demand," while Section 126 of the said law de nes a bill of
exchange as "an unconditional order in writing addressed by one person to another, signed
by the person giving it, requiring the person to whom it is addressed to pay on demand or
at a fixed or determinable future time a sum certain in money to order or to bearer."
The appellate court ruled that 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 of cial capacity as PLCC's manager merely to guarantee the
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 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. It
concluded that Aglibot intended to personally assume the repayment of the loan, pointing
out that in her Counter-Af davit, she even admitted that she was personally indebted to
Santia, and only raised payment as her defense, a clear admission of her liability for the
said loan.
The appellate court refused to give credence to Aglibot's claim that she had an
understanding with Santia that the checks would not be presented to the bank for
payment, but were to be returned to her once she had made cash payments for their face
values on maturity. It noted that Aglibot failed to present any proof that she had indeed
paid cash on the above checks as she claimed. This is precisely why Santia decided to
deposit the checks in order to obtain payment of his loan. cCTIaS

The facts below present a clear situation where Aglibot, as the manager of PLCC, agreed
to accommodate its loan to Santia by issuing her own post-dated checks in payment
thereof. She is what the Negotiable Instruments Law calls an accommodation party. 2 3
Concerning the liability of an accommodation party, Section 29 of the said law provides:
Sec. 29. Liability of an 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.

As elaborated in The Phil. Bank of Commerce v. Aruego: 2 4

An accommodation party is one who has signed the instrument as maker, drawer,
indorser, without receiving value therefor and for the purpose of lending his name
to some other person. Such person is liable on the instrument to a holder for
value, notwithstanding 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. . .
. . 2 5 (Citation omitted)
TSaEcH

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. 2 6 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. 2 7
Moreover, it was held in Aruego that unlike in a contract of suretyship, the liability of the
accommodation party remains not only primary but also unconditional to a holder for
value, such that 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.
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 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 rst go after PLCC for the
payment of its loan. 2 8 It would have been otherwise had it been shown that Aglibot was a
mere guarantor, except that since checks were issued ostensibly in payment for the loan,
the provisions of the Negotiable Instruments Law must take primacy in application.
WHEREFORE , premises considered, the Petition for Review on Certiorari i s DENIED and
the Decision dated March 18, 2008 of the Court of Appeals in CA-G.R. SP No. 100021 is
hereby AFFIRMED .
SO ORDERED . HTSIEa

Leonardo-de Castro, Del Castillo, * Villarama, Jr. and Perez, ** JJ., concur.

Footnotes

* Additional member per Raffle dated November 7, 2012 vice Associate Justice Lucas P.
Bersamin.
** Acting member per Special Order No. 1385 dated December 4, 2012 vice Chief Justice
Maria Lourdes P. A. Sereno.
1. Penned by Associate Justice Estela M. Perlas-Bernabe (now a member of this Court),
with Associate Justices Portia Aliño-Hormachuelos and Lucas P. Bersamin (now also a
member of this Court), concurring; rollo, pp. 88-94.

2. Id. at 40-44.
3. Id. at 93.
4. Id. at 75-80.
5. Id. at 10-11.
6. Id. at 26.
7. Id. at 44.
8. Id. at 90.
9. Id. at 91.
10. Id.
11. Id.
12. Id. at 43.
13. Baylon v. Court of Appeals, 371 Phil. 435, 443 (1999), citing World Wide Insurance and
Surety Co., Inc. v. Jose, 96 Phil. 45 (1954); Visayan Surety and Insurance Corp. v. De
Laperal, 69 Phil. 688 (1940).
14. Id. at 443-444, citing Viuda de Syquia v. Jacinto, 60 Phil. 861, 868 (1934).
15. Art. 2062. In every action by the creditor, which must be against the principal debtor
alone, except in the cases mentioned in Article 2059, the former shall ask the court to
notify the guarantor of the action. The guarantor may appear so that he may, if he so
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 desire, set up such defenses as are granted him by law. The benefit of excussion
mentioned in Article 2058 shall always be unimpaired, even if judgment should be
rendered against the principal debtor and the guarantor in case of appearance by the
latter.

16. Art. 2059. This excussion shall not take place:

(1) If the guarantor has expressly renounced it;
(2) If he has bound himself solidarily with the debtor;
(3) In case of insolvency of the debtor;
(4) When he has absconded, or cannot be sued within the Philippines unless he has
left manager or representative;
(5) If it may be presumed that an execution on the property of the principal debtor
would not result in the satisfaction of the obligation.
17. Article 2047 of the Civil Code defines it as follows:
By guaranty a person, called the guarantor, binds himself to the creditor to fulfill the
obligation of the principal debtor in case the latter should fail to do so.
18. Prudential Bank v. Intermediate Appellate Court, G.R. No. 74886, December 8, 1992, 216
SCRA 257, 275-276.
19. Art. 1358. The following must appear in a public document:

(1) Acts and contracts which have for their object the creation, transmission,
modification or extinguishment of real rights over immovable property; sales of real
property or of an interest therein are governed by Articles 1403, No. 2 and 1405;
(2) The cession, repudiation or renunciation of hereditary rights or of those of the
conjugal partnership of gains;
(3) The power to administer property, or any other power which has for its object an
act appearing or which should appear in a public document, or should prejudice a third
person; and
(4) The cession of actions or rights proceeding from an act appearing in a public
document. All other contracts where the amount involved exceeds five hundred pesos
must appear in writing, even a private one. But sales of goods, chattels or things in
action are governed by Articles 1403, No. 2 and 1405.
20. Supra note 18.
21. Orduña v. Fuentebella, G.R. No. 176841, June 29, 2010, 622 SCRA 146, 158;
Municipality of Hagonoy, Bulacan v. Dumdum, Jr., G.R. No. 168289, March 22, 2010, 616
SCRA 315.
22. Rollo, p. 92.
23. See Stelco Marketing Corporation v. Court of Appeals, G.R. No. 96160, June 17, 1992,
210 SCRA 51, 57 citing Agbayani, COMMERCIAL LAWS OF THE PHILIPPINES, 1975 ed.,
Vol. I.
24. 102 SCRA 530.
25. Id. at 539-540.
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 26. Garcia v. Llamas, 462 Phil. 779, 794 (2003), citing Spouses Gardose v. Tarroza, 352
Phil. 797 (1998), Palmares v. CA, 351 Phil. 664 (1998).
27. Ang Tiong v. Ting, 130 Phil. 741, 744 (1968).
28. Sps. Gardose v. Tarroza, 352 Phil. 797 (1998).

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