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[No. 24224. November 3, 1925]

THE PHILIPPINE NATIONAL BANK, plaintiff and appellee, vs.

RAMON MAZA and FRANCISCO MECENAS, defendants and
appellants.

1. BlLLS AND NOTES; NEGOTIABLE INSTRUMENTS LAW;

LlABILITY OF ACCOMMODATION PARTY.—The accommodation
party can claim

208

208 PHILIPPINE REPORTS ANNOTATED

National Bank vs. Maza and Mecenas

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.

2. ID.; ID.; ID.; CONSIDERATION.—To fasten liability upon an

accommodation maker, it is not necessary that any consideration
should move to him.

3. ID.; ID.; ID.; RIGHTS or ACCOMMODATION PARTY AFTER

PAYMENT.— After making payment to the holder, the
accommodation party may sue the accommodated party for
reimbursement, since the relation between them is in effect that of
principal and surety, the accommodation party being the surety.

APPEAL from a judgment of the Court of First Instance of Iloilo.

Rovira, J.
The facts are stated in the opinion of the court.
     Lutero, Lutero & Maza for appellants.
     Roman J. Lacson for appellee.

MALCOLM, J.:

The Philippine National Bank is suing Ramon Maza and Francisco

Mecenas on five promissory notes of ten thousand pesos (P10,000)
each.
Maza and Mecenas executed two of the promissory notes on
January 20, 1921, due three months after date. The three other
notes due four months after date were executed by the same parties
on January 21, 1921. One of the above-mentioned notes, typical of
the rest, reads as follows:
"P10,000.00 Jan. 20, 1921. ILOILO, I. F.,                

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"A los tres meses de la fecha, pagaremos mancomunada y solidariamente a

la orden del Philippine National Bank, Iloílo, Iloilo, I. F., la cantidad de
diez mil (P10,000) pesos en el Philippine National Bank.
"Iloilo, I. F.

"Valor Recibido.
"No. 340 Pagadero el 4/20/21

(Fdos.)      "RAMON MAZA               

"FRANCISCO MECENAS"

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VOL. 48, NOVEMBER 3, 1925 209

National Bank vs. Maza and Mecenas

The. notes were not taken up by Maza and Mecenas at maturity.

The obligations with accumulated interest totaled P65,207.73 on
September 22, 1924.
To recover the amounts stated on the face of the notes with back
interest, action was begun by the Philippine National Bank in the
Court of First Instance of Iloilo against Ramon Maza and Francisco
Mecenas. The special defense interposed by the defendants was that
the promissory notes were sent in blank to them by Enrique Echaus
with the request that they sign them so that he, Echaus, might
negotiate them with the Philippine National Bank in case of need;
that the defendants have not negotiated the promissory notes with
the bank, nor have they received the value thereof, or delivered
them to the bank in payment of any preexisting debt; and that it
was Enrique Echaus who negotiated the notes with the bank and
who is accordingly the real party in interest and the party liable for
the payment of the notes. Defendants also moved that Echaus be
ordered included as one of the defendants. The trial judge denied
the motion. Judgment was rendered in favor of the plaintiff and
against the defendants jointly and severally for a total of
P65,207.73, with interest at 9 per cent on twenty thousand pesos
(P20,000) from September 23, 1924, or at the rate of five pesos (P5)
a day, and with interest at 9 per cent on thirty thousand pesos
(P30,000) from September 23, 1924, or at the rate of P7.50 a day,
and with costs.
Four errors are assigned by the defendants on appeal. The first
error relates to the order of the trial judge refusing to require
Enrique Echaus to become a party to the action. As the defendants
failed to duly except to the order, they are not now entitled to ask
this court to review the ruling. Moreover, it is not evident that
Echaus was an indispensable party. The other three errors go to the
merits and rest on the same foundation as the special defense.
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National Bank vs. Maza and Mecenas

From the pleadings and the stipulation of facts, it is deduced that

the def endants admit the genuineness and due execution of the
instruments sued on (Code of Civil Procedure, secs. 103, 285;
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Ramirez vs. Orientalist Co. and Fernandez [1918], 38 Phil., 634).

Neither do the appellants point out any mistake in regard to the
amount and interest that the lower court sentenced them to pay to
the plaintiff bank. Predicated on these premises, from whatever
point of view we look at the case, we arrive at the same conclusion
—that the defendants are liable.
On the first assumption that Maza and Mecenas were the
principals and Echaus the agent, as argued by counsel for the
appellee, the principals must fulfill their obligations (Civil Code,
art. 1727). On another assumption, which is a fact, that the
defendants are exactly what they appear to be, the makers of the
negotiable instruments, then they must keep their engagement and
must pay as promised. Their liability on the instruments is primary
and unconditional. (Negotiable Instruments Law, Act No. 2031, sec.
60.)
The most plausible and reasonable stand for the defendants is
that they are accommodation parties. But as accommodation
parties, the defendants having signed the instruments without
receiving value therefor and for the purpose of lending their names
to some other person, 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.
(Negotiable Instruments Law, Act No. 2031, sec. 29; First Nat.
Bank of Elgin vs. Bach [1920], 98 Ore., 332.)
The defense is made to the action that the defendants never
received the value of the promissory notes. It is, of course, f
undamental that an instrument given without consideration does
not create any obligation at law or in equity in favor of the payee.
However, to fasten liability upon
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VOL. 48, NOVEMBER 3, 1925 211

De Guzman vs. Bd. of 'Canvassers of La Union, and Lucero

an accommodation maker, it is not necessary that any consideration

should move to him. The consideration which supports the promise
of the accommodation maker is that parted with by the person
taking the note and received by the person accommodated. (5
Uniform Laws, Annotated, pp. 140 et seq.; Clark vs. Sellner [1921],.
42 Phil., 384; First National Bank of Hancock vs. Johnson [1903],
133 Mich., 700; 103 Am. St, Rep., 468; Marling vs. Jones [1909], 138
Wis., 82; 131 Am. St. Rep., 996; Schoenwetter vs. Schoenwetter
[1916], 164 Wis., 131.)
While perhaps unnecessary to this decision, it may properly be
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.
Judgment affirmed with costs.

          Avanceña, C. J., Street, Villamor, Ostrand, Johns,

Romualdez, and Villa-Real, JJ., concur.

Judgment affirmed.
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