Romeo Garcia and Eduardo de Jesus borrowed 400,000 pesos from Dionisio Llamas and issued a promissory note binding themselves solidarily. Garcia argued he signed as an accommodation party. The RTC and CA ruled against Garcia, finding no novation had occurred and the note was non-negotiable so the Negotiable Instruments Law did not apply. Even if it did apply, an accommodation party is still liable to a holder for value. The relation between an accommodation party and the party accommodated is that of principal and surety.
Romeo Garcia and Eduardo de Jesus borrowed 400,000 pesos from Dionisio Llamas and issued a promissory note binding themselves solidarily. Garcia argued he signed as an accommodation party. The RTC and CA ruled against Garcia, finding no novation had occurred and the note was non-negotiable so the Negotiable Instruments Law did not apply. Even if it did apply, an accommodation party is still liable to a holder for value. The relation between an accommodation party and the party accommodated is that of principal and surety.
Romeo Garcia and Eduardo de Jesus borrowed 400,000 pesos from Dionisio Llamas and issued a promissory note binding themselves solidarily. Garcia argued he signed as an accommodation party. The RTC and CA ruled against Garcia, finding no novation had occurred and the note was non-negotiable so the Negotiable Instruments Law did not apply. Even if it did apply, an accommodation party is still liable to a holder for value. The relation between an accommodation party and the party accommodated is that of principal and surety.