FACTS:

Two deeds of mortgages were issued by spouses Racho in favor of GSIS as security for two loans obtained by them.  They also executed a promissory note.    Due  to  the  failure  to  comply  with  the  terms  of  the  mortgage,  the mortgages  were  extrajudicially  foreclosed.    The  foreclosure  was  being assailed by the spouses as they alleged that the mortgage contracts were signed  not  as  guarantees  or  sureties  but  merely  gave  their  common property for the sole benefit of the other spouses.  Both sides of the case
used the provisions on accommodation parties in the Negotiable Instruments Law.  
 
The trial court dismissed the action but this was reversed by the appellate court.  
 

HELD:

Both  parties  rely  on  the  Negotiable Instruments Law  but  this  is  misplaced.    The  promissory  note and the deeds of mortgage are not negotiable instruments as they lack the fourth requisite which is it must be payable to order or bearer.