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G.R. No. L-24224 November 3, 1925
PHILIPPINE NATIONAL BANK vs. RAMON MAZA, ET AL. -->

EN BANC

G.R. No. L-24224 November 3, 1925

THE PHILIPPINE NATIONAL BANK, Plaintiff-Appellee, vs. RAMON MAZA and FRANCISCO MECENAS, Defendants-Appellants.

Lutero, Lutero and 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.chanroblesvirtualawlibrary chanrobles virtual law library

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. 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          ILOILO, I.F. Jan. 20, 1921. chanrobles virtual law library

A los tres meses de la fecha, pagaremos mancomunada y solidariamente a la orden del Philippine National Bank, Iloilo, Iloilo, I. F., la cantidad de diez mil (P10,000) pesos en el Philippine National Bank.chanroblesvirtualawlibrary chanrobles virtual law library

Iloilo, I. F.chanroblesvirtualawlibrary chanrobles virtual law library

Valor Recibido.chanroblesvirtualawlibrary chanrobles virtual law library

No. 340 Pagadero el 4/20/21chanrobles virtual law library

(Fdos.) RAMOS MAZA
FRANCISCO 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.chanroblesvirtualawlibrary chanrobles virtual law library

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 noted 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 (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 P7.5 a day, and with costs.chanroblesvirtualawlibrary chanrobles virtual law library

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 error go to the merits and rest on the same foundation as the special defense.chanroblesvirtualawlibrary chanrobles virtual law library

From the pleadings and the stipulation of facts, it is deduced that the defendants admit the genuineness and due execution of the instruments sued on . 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.chanroblesvirtualawlibrary chanrobles virtual law library

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. 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.chanroblesvirtualawlibrary chanrobles virtual law library

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.chanroblesvirtualawlibrary chanrobles virtual law library

The defense is made to the action that the defendants never received the value of the promissory notes. it is, of course, fundamental 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 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.chanroblesvirtualawlibrary chanrobles virtual law library

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.chanroblesvirtualawlibrary chanrobles virtual law library

Judgment affirmed with costs.chanroblesvirtualawlibrary chanrobles virtual law library

Avanceña, C. J., Street, Villamor, Ostrand, Johns, Romualdez, and Villa-Real, JJ., concur.