50 PHIL 241



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
mortgage credit.
MANILA, .................................................
    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.
    Protest waived.
    (Sgd.) N XAVIER
    M. G. VELOSO.

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.


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.