A. Juanita Salas v. CA GR No. 76788 Jan. 22,
; RIGHT OF A HOLDER IN DUE
1990
1. COMMERCIAL LAW; NEGOTIABLE
INSTRUMENT; REQUISITES; SATISFIED IN
CASE AT BAR. — The questioned promissory note
shows that it is a negotiable instrument, having
complied with the requisites under the law as
follows: [a] it is in writing and signed by the maker
Juanita Salas; [b] it contains an unconditional
promise to pay the amount of P58,138.20; [c] it is
payable at a fixed or determinable future time which
is "P1,614.95 monthly for 36 months due and
payable on the 21st day of each month starting
March 21, 1980 thru and inclusive of Feb. 21, 1983;"
[d] it is payable to Violago Motor Sales
Corporation, or order and as such, [e] the drawee is
named or indicated with certainty.
2. ID.; NEGOTIABLE AND NON-NEGOTIABLE
INSTRUMENT, DISTINGUISHED. — In the case
of Consolidated Plywood Industries Inc. v. IFC
Leasing and Acceptance Corp., this Court had the
occasion to clearly distinguish between a negotiable
and a non-negotiable instrument. Among others, the
instrument in order to be considered negotiable
must contain the so-called "words of negotiability —
i.e., must be payable to 'order' or 'bearer.'" Under
Section 8 of the Negotiable Instruments Law, there
are only two ways by which an instrument may be
made payable to order. There must always be a
specified person named in the instrument and the
bill or note is to be paid to the person designated in
the instrument or to any person to whom he has
indorsed and delivered the same. Without the words
"or order" or "to the order of", the instrument is
payable only to the person designated therein and is
therefore non-negotiable. Any subsequent
purchaser thereof will not enjoy the advantages of
being a holder of a negotiable instrument, but will
merely "step into the shoes" of the person designated
in the instrument and will thus be open to all
defenses available against the latter.
3. ID.; NEGOTIABLE INSTRUMENTS;
REQUISITES OF HOLDER IN DUE COURSE. — A
holder in due course, having taken the instrument
under the following conditions: [a] it is complete and
regular upon its face; [b] it became the holder
thereof before it was overdue, and without notice
that it had previously been dishonored; [c] it took
the same in good faith and for value; and [d] when it
was negotiated to Filinvest, the latter had no notice
of any infirmity in the instrument or defect in the
title of VMS Corporation.
4. ID.; ID.
COURSE; APPLICABLE IN THE CASE AT BAR. —
Respondent corporation holds the instrument free
from any defect of title of prior parties, and free from
defenses available to prior parties among
themselves, and may enforce payment of the
instrument for the full amount thereof. This being
so, petitioner cannot set up against respondent the
defense of nullity of the contract of sale between her
and VMS. Even assuming for the sake of argument
that there is an iota of truth in petitioner's allegation
that there was in fact deception made upon her in
that the vehicle she purchased was different from
that actually delivered to her, this matter cannot be
passed upon in the case before us, where the VMS
was never impleaded as a party.
B. Vicente R. De Ocampo & Co. v. Anita
Gatchalian, et. al. GR No. L-15126 Nov. 30,
1961
1. BILLS, NOTES AND CHECKS; NEGOTIABLE
INSTRUMENTS; HOLDER IN DUE COURSE. —
Section 52 (c) provides that a holder in due course is
one who takes the instrument "in good faith and for
value;" Section 59, "that every holder is
deemed prima facie to be holder in due course;" and
Section 52 (d), that in order that one may be a holder
in due course it is necessary that "at the time the
instrument was negotiated" to him "he had no notice
of any . . . defect in the title of the person negotiating
it;" and lastly Section 59, that every holder is
deemed prima facie to be a holder in due course.
2. ID.; ID.; WHEN A HOLDER IS NOT A HOLDER
IN DUE COURSE. — Where a holder's title is
defective or suspicious, it cannot be stated that the
payee acquired the check without the knowledge of
said defect in holder's title, and for this reason the
presumption that it is a holder in due course or that
it acquired the instrument in good faith does not
exist.
3. ID.; ID.; HOLDER IN DUE COURSE; WHEN
PROOF OF GOOD FAITH REQUIRED. — Where the
payee acquired the check under circumstances
which should have put it to inquiry, why the holder
had the check and used it, to pay his own personal
account, the duty devolved upon it to prove that it
actually acquired said check in good faith.
C. Bataan Cigar and Cigarette Factory, Inc. v.
Court of Appeals, G.R. No. 93048, [March 3,
1994], 300 PHIL 690-697
1. COMMERCIAL LAW; NEGOTIABLE
INSTRUMENTS LAW; HOLDER IN DUE COURSE;
1
REQUISITES. — The Negotiable Instruments Law
states what constitutes a holder in due course, thus:
"Sec. 52 - A holder in due course is a holder who has
taken the instrument under the following
conditions: (a) That it is complete and regular upon
its face; (b) That he became the holder of it before it
was overdue, and without notice that it had been
previously dishonored, if such was the fact; (c) That
he took it in good faith and for value; (d) That at the
time it was negotiated to him he had no notice of any
infirmity in the instrument or defect in the title of
the person negotiating it."
2. ID.; ID.; EVERY HOLDER DEEMED PRIMA
FACIE HOLDER IN DUE COURSE. — Section 59 of
the NIL further states that every holder is
deemed prima facie a holder in due course.
However, when it is shown that the title of any
person who has negotiated the instrument was
defective, the burden is on the holder to prove that
he or some person under whom he claims, acquired
the title as holder in due course.
3. ID.; ID.; CHECK; DEFINED. — A check is defined
by law as a bill of exchange drawn on a bank payable
on demand.
4. ID.; ID.; ID.; CROSSED CHECK; KINDS. —
Crossed check is one where two parallel lines are
drawn across its face or across a corner thereof. It
may crossed generally or specially. A check is
crossed specially when the name of a particular
banker or a company is written between the parallel
lines drawn. It is crossed generally when only the
words "and company" are written or nothing is
written at all between the parallel lines. It may be
issued so that presentment can be made only by a
bank. Veritably the Negotiable Instruments Law
(NIL) does not mention "crossed checks," although
Article 541 of the Code of Commerce refers to such
instruments.
5. ID.; ID.; ID.; NEGOTIABILITY NOT AFFECTED
BY ITS BEING CROSSED. — According to
commentators, the negotiability of a check is not
affected by its being crossed, whether specially or
generally. It may legally be negotiated from one
person to another as long as the one who encashes
the check with the drawee bank is another bank, or
if it is especially crossed, by the bank mentioned
between the parallel lines. This is specially true in
England where the Negotiable Instrument Law
originated.
6. ID.; ID.; ID.; EFFECTS OF CROSSING A CHECK.
— Crossing of a check should have the following
effects: (a) the check may not be encashed but only
deposited in the bank; (b) the check may be
negotiated only once — to one who has an account
with a bank; (c) and the act of crossing the check
serves as warning to the holder that the check has
been issued for a definite purpose so that he must
inquire if he has received the check pursuant to that
purpose, otherwise, he is not a holder in due course.
7. ID.; ID.; ID.; CROSSING OF CHECK SHOULD
PUT HOLDER ON INQUIRY; EFFECT OF
OMISSION THEREOF. — It is then settled that
crossing of checks should put the holder on inquiry
and upon him devolves the duty to ascertain the
indorser's title to the check or the nature of his
possession. Failing in this respect, the holder is
declared guilty of gross negligence amounting to
legal absence of good faith, contrary to Sec. 52(c) of
the Negotiable Instruments Law, and as such the
consensus of authority is to the effect that the holder
of the check is not a holder in due course.
8. ID.; ID.; ID.; ID.; ID.; DRAWER NOT OBLIGED
TO PAY CHECKS; CASE AT BAR. — In the present
case, BCCFI's defense in stopping payment is as
good to SIHI as it is to George King. Because, really,
the checks were issued with the intention that
George King would supply BCCFI with the bales of
tobacco leaf. There being failure of consideration,
SIHI is not a holder in due course. Consequently,
BCCFI cannot be obliged to pay the checks.
9. ID.; ID.; ID.; ID.; ID.; ID.; HOLDER CAN STILL
COLLECT FROM IMMEDIATE INDORSER. — The
foregoing does not mean, however, that respondent
could not recover from the checks. The only
disadvantage of a holder who is not a holder in due
course is that the instrument is subject to defenses
as if it were non-negotiable. Hence, respondent can
collect from the immediate indorser, in this case,
George King.
D. ||| Ilusorio v. Court of Appeals, G.R. No.
139130, [November 27, 2002], 441 PHIL 335-
347
Petitioner is a prominent businessman, and as he
was going out of the country a number of times, he
entrusted to his secretary his credit cards and his
checkbook with blank checks. Subsequently,
petitioner filed a criminal action against his
aforesaid secretary for estafa thru falsification for
encashing and depositing to her personal account
seventeen checks drawn against the account of the
petitioner at respondent bank. Petitioner then
requested the respondent bank to credit back and
restore to his account the value of the checks which
were wrongfully encashed, but respondent bank
2
refused. Hence, petitioner filed the instant case.
Manila Bank sought the expertise of the National
Bureau of Investigation in determining the
genuineness of the signatures appearing on the
checks. However, petitioner failed to submit his
specimen signatures for purposes of comparison
with those on the questioned checks. Consequently,
the trial court dismissed the case. On appeal, the
Court of Appeals held that petitioner's own
negligence was the proximate cause of his loss.
Hence, this petition. SaDICE
In affirming the decision of the Court of Appeals, the
Supreme Court ruled that petitioner has no cause of
action against Manila Bank. To be entitled to
damages, petitioner has the burden of proving
negligence on the part of the bank for failure to
detect the discrepancy in the signatures on the
checks. It is incumbent upon petitioner to establish
the fact of forgery, i.e., by submitting his specimen
signatures and comparing them with those on the
questioned checks. Petitioner, by his own inaction,
was precluded from setting up forgery.
The Court likewise ruled that under Section 23 of the
Negotiable Instruments Law, petitioner is precluded
from setting up the forgery, assuming there is
forgery, due to his own negligence in entrusting to
his secretary his credit cards and checkbook
including the verification of his statements of
account.
E. ||| Quirino Gonzales Logging
Concessionaire v. Court of Appeals, G.R. No.
126568, [April 30, 2003], 450 PHIL 218-233
Petitioners obtained a credit line from respondent
bank secured by a real estate mortgage on four
parcels of land. The bank foreclosed the mortgage
and bought the properties covered thereby for
failure of petitioners to pay their obligation.
Thereafter, respondent bank filed a complaint for
sum of money against petitioners alleging the non-
payment of the balance after proceeds of the
foreclosure sale were applied to the obligation. The
trial court ruled in favor of petitioners. The Court of
Appeals reversed the decision of the trial court.
The Supreme Court ruled that the action to recover
the deficient amount of the obligation after the
foreclosure of the mortgage had already prescribed.
A mortgage action prescribes after ten years from
the time the right of action accrued. In the present
case, the bank, as mortgagee, had the right to claim
payment of the deficiency after it had foreclosed the
mortgage in 1965. The prescriptive period started to
run against the bank in 1965. As it filed the
complaint only on January 27, 1977, more than ten
years had already elapsed, hence, the action had by
then prescribed.
The Court further ruled that the properties
foreclosed cannot be reconveyed to petitioners.
Though the bank's action for deficiency is barred by
prescription, nothing irregular attended the
foreclosure proceedings to warrant the
reconveyance of the properties covered thereby.
F. |||Philippine Commercial International
Bank v. Court of Appeals, G.R. No. 121413,
121479, 128604, [January 29, 2001], 403
PHIL 361-390
Ford Philippines drew and issued Citibank Check.
No. SN 04867 on October 19, 1977, Citibank Check
No. SN 10597 on July 19, 1978 and Citibank Check
No. SN-16508 on April 20, 1979, all in favor of the
Commissioner of Internal Revenue (CIR) for
payment of its percentage taxes. The checks were
crossed and deposited with the IBAA, now PCIB,
BIR's authorized collecting bank. The first check was
cleared containing an indorsement that "all prior
indorsements and/or lack of indorsements
guaranteed." The same, however, was replaced with
two (2) IBAA's managers' checks based on a call and
letter request made by Godofredo Rivera, Ford's
General Ledger Accountant, on an alleged error in
the computation of the tax due without IBAA
verifying the authority of Rivera. These manager's
checks were later deposited in another bank and
misappropriated by the syndicate. The last two
checks were cleared by the Citibank but failed to
discover that the clearing stamps do not bear any
initials. The proceeds of the checks were also
illegally diverted or switched by officers of PCIB —
members of the syndicate, who eventually encashed
them. Ford, which was compelled to pay anew the
percentage taxes, sued in two actions for collection
against the two banks on January 20, 1983, barely
six years from the date the first check was returned
to the drawer. The direct perpetrators of the crime
are now fugitives from justice.
In the first case, the trial court held that Citibank
and IBAA were jointly and severally liable for the
checks, but on review by certiorari,
the Court of Appeals held only IBAA (PCIB) solely
liable for the amount of the first check. In the second
case involving the last two checks, the
trial court absolved PCIB from liability and held that
only the Citibank is liable for the checks issued by
Ford. However, on appeal, the Court of Appeals held
both banks liable for negligence in the selection and
supervision oftheir employees resulting in the
3
erroneous encashment of the checks. These two
rulings became the subject of the present recourse.
The relationship between a of the debtor or obligation for which it was given.
holder of a commercial paper and the bank to which
it is sent for collection is that of a principal and an
agent and the diversion of the amount of the check is
justified only by proof of authority from the drawer;
that in crossed checks, the collecting bank is bound
to scrutinize the check and know its depositors
before clearing indorsement; that as a general rule,
banks are liable for wrongful or tortuous acts of its
agents within the scope and in the course of their
employment; that failure of the drawee bank to
seasonably discover irregularity in the checks
constitutes negligence and renders the bank liable
for loss of proceeds ofthe checks; that an action
upon a check prescribes in ten (10) years; and that
the contributory negligence of the drawer shall
reduce the damages he may recover against the
collecting bank.
G. Myron C. Papa v. A.U. Valencia, et. al. G.R.
No. 105188, [January 23, 1998]
This is a petition for review on certiorari filed by
petitioner assailing the decision of the Court of
Appeals finding that his alleged sale of the lot
covered by TCT No. 28993 to respondent Felix
Peñarroyo through respondent A.U. Valencia and
Co., Inc. had been consummated. Petitioner
contends that the appellate court's finding was based
on the erroneous presumption that the check which
he received from respondents had been encashed,
citing Article 1249 of the Civil Code, which provides,
in part, that payment by checks shall produce the
effect of payment only when they have been cashed
or when through the fault of the creditor they have
been impaired. Petitioner insists that he never
cashed said check and therefore, its delivery never
produced the effect of payment. Petitioner, while
admitting that he issued receipts for the payments,
asserts that said receipts do not prove payment.
Petitioner avers that there must be a showing that
said check had been encashed.
The Supreme Court finds no merit in petitioner's
arguments. Granting that petitioner had never
encashed the check, his failure to do so for more than
ten (10) years resulted in the impairment of the
check through his unreasonable and unexplained
delay. While it is true that the delivery of a check
produces the effect of payment only when it is
cashed, pursuant to Art. 1249 of the Civil Code, the
rule is otherwise if the debtor is prejudiced by the
creditor's unreasonable delay in presentment. The
acceptance of a check implies an undertaking of due
diligence in presenting it for payment, and if he from
whom it is received sustains loss by want of such
diligence, it will be held to operate as actual payment
Considering that respondents had fulfilled their part
of the contract of sale by delivering the payment of
the purchase price, said respondents, therefore, had
the right to compel petitioner to deliver to them the
owner's duplicate of TCT No. 28993 and the peaceful
possession and enjoyment to the lot in question.
H. Hongkong and Shanghai Banking Corp.
Ltd. v. Catalan, G.R. No. 159590, 159591,
[October 18, 2004], 483 PHIL 525-545
Does the complaint state a cause of action against
HSBANK and HSBC TRUSTEE?
The elementary test for failure to state .a cause of
action is whether the complaint alleges facts which if
true would justify the relief demanded. Stated
otherwise, may the court render a valid judgment
upon the facts alleged therein? 23 The inquiry is
into the sufficiency, not the veracity of the material
allegations. 24 If the allegations in the complaint
furnish sufficient basis on which it can be
maintained, it should not be dismissed regardless of
the defense that may be presented by the
defendants. 25
Catalan anchors her complaint for damages
on Article 19 of the Civil Code. It speaks of the
fundamental principle of law and human conduct
that a person "must, in the exercise of his rights and
in the performance of his duties, act with justice,
give every one his due, and observe honesty and
good faith." It sets the standards which may be
observed not only in the exercise of one's rights but
also in the performance of one's duties. When a right
is exercised in a manner which does not conform
with the norms enshrined in Article 19 and results in
damage to another, a legal wrong is thereby
committed for which the wrongdoer must be held
responsible. 26 But a right, though by itself legal
because recognized or granted by law as such, may
nevertheless become the source of some illegality. A
person should be protected only when he acts in the
legitimate exercise of his right, that is, when he acts
with prudence and in good faith; but not when he
acts with negligence or abuse. 27 There is an abuse
of right when it is exercised for the only purpose of
prejudicing or injuring another. The exercise of a
right must be in accordance with the purpose for
which it was established, and must not be excessive
or unduly harsh; there must be no intention to injure
another. 28
4
Thus, in order to be liable under the abuse of rights
principle, three elements must concur, to wit: (a)
that there is a legal right or duty; (b) which is
exercised in bad faith; and (c) for the sole intent of
prejudicing or injuring another. 29
In this instance, after carefully examining the
amended complaint, we are convinced that the
allegations therein are in the nature of an action
based on tort under Article 19 of the Civil Code. It is
evident that Catalan is suing HSBANK
and HSBC TRUSTEE for unjustified and willful
refusal to pay the value of the checks. DASCIc
HSBANK is being sued for unwarranted failure to
pay the checks notwithstanding the repeated
assurance of the drawer Thomson as to the
authenticity of the checks and frequent directives to
pay the value thereof to Catalan. Her allegations in
the complaint that the gross inaction of HSBANK on
Thomson's instructions, as well as its evident failure
to inform Catalan of the reason for its continued
inaction and non-payment of the checks, smack of
insouciance on its part, are sufficient statements of
clear abuse of right for which it may be held liable
to Catalan for any damages she incurred resulting
therefrom. HSBANK's actions, or lack thereof,
prevented Catalanfrom seeking further redress with
Thomson for the recovery of her claim while the
latter was alive.
HSBANK claims that Catalan has no cause of action
because under Section 189 of the Negotiable
Instruments Law, "a check of itself does not operate
as an assignment of any part of the funds to the
credit of the drawer with the bank, and the bank is
not liable to the holder unless and until it accepts or
certifies it." However, HSBANK is not being sued on
the value of the check itself but for how it acted in
relation to Catalan's claim for payment despite the
repeated directives of the drawer Thomson to
recognize the check the latter issued. Catalan may
have prayed that she be paid the value of the checks
but it is axiomatic that what determines the nature
of an action, as well as which court has jurisdiction
over it, are the allegations of the complaint,
irrespective of whether or not the plaintiff is entitled
to recover upon all or some of the claims asserted
therein.
Anent HSBC TRUSTEE, it is being sued for the
baseless rejection of Catalan's claim.
When Catalan parted with the checks as a
requirement for the processing of her claim, even
going to the extent of traveling to Hongkong to
deliver personally the checks, HSBC TRUSTEE
summarily disapproved her claim with nary a
reason. HSBCTRUSTEE gave no heed
to Catalan's incessant appeals for an explanation.
Her pleas fell on deaf and uncaring corporate ears.
Clearly, HSBC TRUSTEE's acts are anathema to the
prescription for human conduct enshrined in Article
19 of the Civil Code.
I. ||Crisologo-Jose v. Court of Appeals, G.R.
No. 80599, [September 15, 1989], 258 PHIL
398-409
1. COMMERCIAL LAW; NEGOTIABLE
INSTRUMENTS
LAW; ACCOMMODATION PARTY; REQUISITES
THEREOF, CITED;
THAT ACCOMMODATION PARTY FAILED TO
RECEIVE ANY VALUABLE CONSIDERATION
WHEN HE EXECUTED INSTRUMENT, NOT A
VALID DEFENSE. — To be considered
an accommodation party, a person must (1) be
a party to the instrument, signing as maker, drawer,
acceptor, or indorser, (2) not receive value therefor,
and (3) sign for the purpose of lending his name for
the credit of some other person. Based on the
foregoing requisites, it is not a valid defense that
the accommodation party did not receive any
valuable consideration when he executed the
instrument.
2. ID.; ID.; ID.; LIABLE TO A HOLDER FOR
VALUE. — From the standpoint of contract law, he
differs from the ordinary concept of a debtor therein
in the sense that he has not received any valuable
consideration for the instrument he signs.
Nevertheless, he is liable to a holder for value as if
the contract was not for accommodation, in
whatever capacity
such accommodation party signed the instrument,
whether primarily or secondarily.
3. ID.; ID.; ID.; ID.; DOES NOT INCLUDE NOR
APPLY TO CORPORATIONS, REASON. — Section
29 of the Negotiable Instruments Law which holds
an accommodation party liable on the instrument to
a holder for value, although such holder at the
time of taking the instrument knew him to be only
an accommodation party, does not include nor apply
to corporations which are accommodation parties.
This is because the issue or
indorsement of negotiable paper by a corporation
without consideration and for
the accommodation of another is ultra vires. Hence,
one who has taken the instrument with
knowledge of the accommodation nature thereof
cannot recover against a corporation where it is only
an accommodation party. If the form of the
instrument, or the nature of the transaction, is such
5
as to charge the indorsee with knowledge that the his tender of payment had been refused by
issue or indorsement of the instrument by the petitioner.
corporation is for the accommodation of another, he
cannot recover against the corporation thereon. 7. REMEDIAL LAW; COURTS;
APPELLATE COURT IN CIVIL CASE BEFORE IT
4. ID.; ID.; ID.; ID.; ID.; EXCEPTION. — By MAY NOT INTERFERE IN THE
way of exception, an officer or agent of a corporation RESOLUTION OF CRIMINAL CASE. —
shall have the power to execute or indorse a Respondent court went beyond the ratiocination
negotiable paper in the name of the corporation for called for in the appeal to it in CA-G.R. CV. No.
the accommodation of a third person only if 05464. It digressed into the merits of the aforesaid
specifically authorized to do so. Criminal Case No. Q-14867. That observations made
in the civil case at bar and the intrusion into the
5. ID.; ID.; ID.; CORPORATE OFFICERS HAVE NO merits of the criminal case pending in
POWER TO EXECUTE FOR another court are improper do not have to be
MERE ACCOMMODATION A NEGOTIABLE belabored. In the latter case, the criminal
INSTRUMENT OF THE CORPORATION FOR trial court has to grapple with such factual issues.
THEIR INDIVIDUAL DEBTS OR TRANSACTIONS These are aside from the considerations that the
IN WHICH THEY ARE PERSONALLY LIABLE. — disputed period involved in the criminal case is only
Corporate officers, such as the president and vice- a presumptive rule, juris tantum at that, to
president, have no power to execute for determine whether or not there was
mere accommodation a negotiable knowledge of insufficiency of funds in or credit with
instrument of the corporation for their individual the drawee bank; that payment of civil liability is not
debts or transactions arising from or in relation to a mode for extinguishment of criminal liability; and
matters in which the corporation has no legitimate that the requisite quantum of evidence in the two
concern. Since such accommodation paper cannot types of cases are not the same. To repeat, the
thus be enforced against the corporation, especially foregoing matters are properly addressed to the
since it is not involved in any aspect of the corporate trial court in Criminal Case No. Q-14867, the
business or operations, the inescapable conclusion resolution of which should not be interfered with by
in law and in logic is that the signatories thereof shall respondent Court of Appeals at the present
be personally liable therefor, as well as the posture of said case, much less preempted by the
consequences arising from their acts in connection inappropriate and unnecessary holdings in the
therewith. aforequoted portion of the decision of said
6. ID.; ID.; ID.; A CO-SURETY FOR respondent court. Consequently, we modify the
ACCOMMODATED PARTY WITH WHOM HE; HIS decision of respondent court in CA-G.R. CV No.
CO-SIGNATORY ASSUME SOLIDARY LIABILITY 05464 by setting aside and declaring without force
EX-LEGE FOR THE DEBT INVOLVED. — and effect its pronouncements and findings insofar
Respondent Santos is an accommodation party and as the merits of Criminal Case No. Q-14867 and the
is, therefore, liable for the value of the check. The liability of the accused therein are concerned.
fact that he was only a co-signatory does not detract
from his personal liability. A co-maker or co-drawer |||

under the circumstances in this case is as much

an accommodation party as the other co-signatory
or, for that matter, as a lone signatory in
an accommodation instrument. Under the doctrine
in Philippine Bank of Commerce vs. Aruego, supra,
he is in effect a co-surety for the
accommodated party with whom he and his co-
signatory, as the other co-surety, assume solidary
liability ex lege for the debt involved. With the
dishonor of the check, there was created a debtor-
creditor relationship, as between Atty. Benares and
respondent Santos, on the one hand, and petitioner,
on the other. This circumstance enables respondent
Santos to resort to an action of consignation where