Travel-On vs CA

FACTS:
Petitioner Travel-On Inc. is a travel agency from which Arturo Miranda
procured tickets on behalf of airline passengers and derived commissions
therefrom. Miranda was sued by petitioner to collect on the six postdated
checks he issued which were all dishonored by the drawee banks. Miranda,
however, claimed that he had already fully paid and even overpaid his
obligations and that refunds were in fact due to him. He argued that he had
issued the postdated checks not for the purpose of encashment to pay his
indebtedness but for purposes of accommodation, as he had in the past
accorded similar favors to petitioner. Petitioner however urges that the
postdated checks are per se evidence of liability on the part of private
respondent and further argues that even assuming that the checks were for
accommodation, private respondent is still liable thereunder considering that
petitioner is a holder for value.

ISSUE:
Whether Miranda is liable on the postdated checks he issued even assuming
that said checks were issued for accommodation only.

RULING:
There was no accommodation transaction in the case at bar. In
accommodation transactions recognized by the Negotiable Instruments Law,
an accommodating party lends his credit to the accommodated party, by
issuing or indorsing a check which is held by a payee or indorsee as a holder
in due course, who gave full value therefor to the accommodated party. The
latter, in other words, receives or realizes full value which the accommodated
party then must repay to the accommodating party. But the accommodating
party is bound on the check to the holder in due course who is necessarily a
third party and is not the accommodated party. In the case at bar, Travel-On
was payee of all six (6) checks, it presented these checks for payment at the
drawee bank but the checks bounced. Travel-On obviously was not an
accommodated party; it realized no value on the checks which bounced.
Miranda must be held liable on the checks involved as petitioner is entitled to
the benefit of the statutory presumption that it was a holder in due course and
that the checks were supported by valuable consideration.

**In accommodation transactions recognized by the Negotiable Instruments

Law, an accommodating party lends his credit to the accommodated party, by
issuing or indorsing a check which is held by a payee or indorsee as a holder
in due course, who gave full value therefor to the accommodated party. In the
case at bar, Travel-On was the payee of all six (6) checks, it presented these
checks for payment at the drawee bank but the checks bounced. Travel-On
obviously was not an accommodated party; it realized no value on the checks
which bounced.

Stelco vs CA

FACTS:
Stelco Marketing Corporation sold structural steel bars to RYL Construction
Inc. RYL gave Stelco’s “sister corporation,” Armstrong Industries, a
MetroBank check from Steelweld Corporation. The check was issued by
Steelweld’s President to Romeo Lim, President of RYL, by way of
accommodation, as a guaranty and not in payment of an obligation. When
Armstrong deposited the check at its bank, it was dishonored because it was
drawn against insufficient funds. When so deposited, the check bore two
indorsements, i.e. RYL and Armstrong. Subsequently, Stelco filed a civil case
against RYL and Steelweld to recover the value of the steel products.

ISSUE:
Whether Steelweld as an accommodating party can be held liable by Stelco
for the dishonored check.

RULING:
Steelweld may be held liable but not by Stelco. Under Section 29 of the NIL,
Steelweld Corp. can be held liable for having issued the subject check for the
accommodation of Romeo Lim. An accommodation party is one who has
singed the instrument as maker, drawer, acceptor, or indorser, without
receiving valued 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. Stelco however, cannot be deemed a
holder of the check for value as it does not meet two essential requisites
prescribed by statute, i.e. that it did not become “the holder of it before it was
overdue, and without notice that it had been previously dishonored,” and that
it did not take the check “in good faith and for value.”
BPI vs CA
Benjamin Napiza maintains an account with the Bank of the Philippine Islands
(BPI). In 1987, Napiza was approached by Henry Chan and the latter gave
him a $2,500 Continental Bank Manager’s check. Chan asked if Napiza can
deposit the check to his (Napiza’s BPI account) by way of accommodation
and for the purpose of clearing the said check. Napiza agreed and so he
deposited the check on September 3, 1987. Napiza then delivered a signed
blank withdrawal slip to Chan with the condition that the $2,500.00 may only
be withdrawn if the check cleared. For some reason, the withdrawal slip
ended up in the hands of one Ruben Gayon who went to BPI and successfully
withdrew the $2,500.00. At the time of the withdrawal, the check was not yet
cleared. Then days later, BPI was notified by the drawee bank named in the
check that the check is actually a counterfeit.

ISSUE: Whether or not Napiza may be held liable to refund the amount of the
check.

HELD: No. The Supreme Court ruled that ordinarily, Napiza would have been
liable because he is an accommodation indorser. But due to the attendant
circumstances, Napiza is discharged from liability.

The withdrawal slip indicates as well as the rules promulgated by BPI that
withdrawal from the bank should be accompanied by the presentment of the
account holder’s (Napiza’s) savings bankbook. This was not done so in the
case at bar because Gayon was able to withdraw without it. Further, BPI
allowed the withdrawal even before the check cleared. BPI already credited
the $2,500.00 to Napiza’s account even without the drawee bank clearing the
check. This is contrary to common banking practices and because of such
negligence and lack of diligence, BPI, as the collecting bank, shall suffer the
loss.
AGRO CONGLOMERATES V. SORIANO
348 SCRA 450

FACTS:
Petitioner sold to Wonderland Food Industries two parcels of land.
They stipulated under a Memorandum of Agreement that the terms of
payment would be P1,000,000 in cash, P2,000,000 in shares of stock,
and the balance would be payable in monthly installments. Thereafter,
an addendum was executed between them, qualifying the cash payment.
Instead of cash payment, the vendee authorized the vendor to obtain a
loan from the financier on which the vendee bound itself to pay for. This loan
was to cover for the payment of P1,000,000. This addendum was not
notarized.
Petitioner Soriano signed as maker the promissory notes payable to the
bank. However, the petitioners failed to pay the obligations as they were due.
During that time, the bank was in financial distress and this prompted it
to endorse the promissory notes for collection. The bank gave ample time to
petitioners then to satisfy their obligations.
The trial court held in favor of the bank. It didn't find merit to the
contention that Wonderland was the one to be held liable for the
promissory notes.

HELD:
First, there was no contract of sale that materialized. The original
agreement was that Wonderland would pay cash and petitioner would
deliver possession of the farmlands. But this was changed through an
addendum, that petitioner would instead secure a loan and the settlement of
the same would be shouldered by Wonderland.
Petitioners became liable as accommodation parties. They have the right
after paying the instrument to seek reimbursement from the party
accommodated, since the relation between them has in effect became one of
principal and surety.
Furthermore, as it turned out, the contract of surety between Woodland
and petitioner was extinguished by the rescission of the contract of sale of the
farmland. With the rescission, there was confusion in the persons of the
principal debtor and surety. The addendum thereon likewise lost its
efficacy.