INTESTATE ESTATE OF VICTOR SEVILLA. SIMEON SADAYA vs.

FRANCISCO SEVILLA
G.R. No. L-17845, April 27, 1967
Sanchez, J.

Facts:
Sadaya, Sevilla and Varona executed jointly or severally a promissory
note worth P15,000 in favor of the bank. Varona was the only one who
received the proceeds of the note. Sadaya and Sevilla both signed as co-
makers to accommodate Varona. Thereafter, the bank collected the
remaining balance and interest of P5,416.12 from Sadaya. Varona failed to
reimburse.
 
Consequently, Sevilla died and intestate estate proceedings were
established. Sadaya filed a creditor’s claim on his estate for the payment he
made on the note. The administrator resisted the claim on the ground that
Sevilla didn't receive any proceeds of the loan. The trial court admitted the
claim of Sadaya though tis was reversed by the CA.
 
Issue:
Should the administrator pay half of what Sadaya paid to the bank
using any available funds belonging to the estate of the deceased Sevilla?

HELD:
NO, Sadaya did not have the right to demand payment from his
co-accomodator when the bank had made no judicial demand and
Varona had not been proven insolvent.

Sadaya could have sought reimbursement from Varona as the latter

was the only one who received value for the note executed. 

The court postulated the following rules regarding collection from a co-
accommodation party:
1. A joint and several accommodation maker of a negotiable promissory
note may demand from the principal debtor reimbursement for the
amount that he paid 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 he made the payment by virtue of a judicial
demand and principal debtor is insolvent.
The bank did not make a judicial demand and nothing shows that Varona
was insolvent. Thus, Sadaya cannot proceed against Sevilla for
reimbursement.