ACUNA V. VELOSO
50 PHIL 241
FACTS:At the time of execution of the note, Xavier was the agent of Veloso in the management of the latter’s real property in Manila. Though lacking in capital, Xavier was engaged in real estate trading, so far as his credit permitted, upon his own account. His attention was then attracted to a
piece of property, which was then on the market. Xavier communicated to his principal his desire to acquire the property and at the same time requested that Veloso assist him in the matter. Veloso was later convinced to help out Xavier. Thereafter, Gonzales lent a helping hand by advancing the money needed by Xavier, on the condition that a note should be issued jointly and severally by Xavier and Veloso; and that Xavier should agree to purchase ½ interest from Gonzales which the latter possessed in a
On or before six months after date we will jointly and severally pay in
Manila to the order of ........................... the sum of twenty-five thousand
pesos (P25,000), Philippine currency, for value received of the same in
cash, for commercial operations, and with interest at 10 per cent per
annum, payable monthly.
(Sgd.) N XAVIER
M. G. VELOSO.
Sgd.) MODESTO ALBERTO
The sale of the property ensued. It was found out that the property has already been encumbered by a mortgage with Shanghai Life. And as the value of the property was more than the property mortgaged by Xavier, Gonzales demanded another second mortgage.
A foreclosure proceeding took place and while the result of such was pending, the note was transferred to the hands of Acuna who filed an action against Veloso and Xavier, both of which denied liability. Xavier posed the special defense that he had executed a second mortgage to
secure the note and that he already sold the mortgaged property and another has assumed the indebtedness.
The trial court decided that Veloso and Xavier were solidarily liable to Acuna/Gonzales. Nonetheless, Veloso was held to be an accommodation party, who has a right to reimbursement from Xavier for whatever he may pay for the note.
HELD:The case being cited by defendants is not applicable to the case at bar. The case of Rylee v. Wilkinson contemplates a situation wherein an accommodation maker executes a note in favor of an accommodated party. In the case at bar, the accommodation party and accommodated party
execute a note jointly and severally to a person who advances the face value of the note to one of its makers at the very time of its creation. The consideration for the note is the money advanced to Xavier. Value was given for the note and that is enough. In equity as between Veloso and
Xavier, Veloso is entitled to the rights as a surety and Xavier is the real debtor; but as to the creditor who gave value for the note at the time of its
creation, both of Veloso and Xavier are mere joint and several makers.