the accommodation party does not discharge the

accommodation party (Aglibot o. Santia, December

5, 2012).
PROBLEMS:
1.
On Tune 1, 1990, A obtained a loan of P100,000.00 from B, payable
not later than December 21, 1990. B required A to issue him a check
for that amount to be dated December 20, 1990. Since he does nor
have any checking account, A, with the knowledge of B, requested
his friend, C, president of X Banking Corporation, to accommodate
him. C agreed. He signed a check for the aforesaid amount, dated
December 20, 1990, drawn by X Banking Corporation with the
ABC Commercial Banking Corporation as drawee. The by-laws of
X Banking Corporation requires that checks issued by it must be
signed by the President and the Treasurer or the Vice President.
Since the Treasurer was absent, C requested the Vice President to
co-sign the check, which the latter reluctantly did. The check was
delivered to B. The check was dishonored upon presentation on
due date for insufficiency of funds. (a) Is X Banking Corporation
liable on the check as an accommodation party? (b) If it is not, who
then, under the above facts, is/ are liable?
A:
(a)
X Banking Corporation is not liable because the act of
accommodating the check is an ultra vires act. It is outside the
powers of a corporation to accommodate another not in line
with its own business.
(b)
The president and the vice-president who signed for X
Banking Corporation are liable under the instrument in their
personal capacities (Crisologo Jose v. CA, September 15, 1989)
(1991 Bar).
Santos purchased Vera's car for P50,000.00. Not having enough
cash at hand, Santos offered to pay in check. Vera refused to accept
the check unless it is indorsed by Reyes, their mutual friend. Reyes
indorsed Santos' check and Vera, knowing that Reyes had not
received any value for indorsing the check, accepted it. The next
day, Vera presented the check to the drawee bank for payment.
Payment was refused for lack of funds. Vera gave notice of dishonor
to Reyes, but Reyes refused to pay, saying that he indorsed merely
as a friend. In the event Reyes voluntarily pays Vera, does Reyes
have a right to recover from Santos? Explain.
Yes, Reyes can recover from Santos. The relation between Santos and
Reyes is in effect that of principal and surety, the accommodation
party. Reyes, being the surety of Santos, can recover from the latter
whatever amount that he paid to Vera (PNB o. Maza and Macenas,
48 Phil. 207; Sec. 29, NIL).