G.R. No. 128574 - Universal Robina Sugar Milling Corp. vs. Heirs of Teves

On March 28, 1949, Victor Sevilla, Oscar Varona, and Simeon Sadaya executed a promissory note in the amount of P15,000.00 in favor of the Bank of the Philippine Islands, or its order.
The note carried an interest rate of 8% per annum and was payable on demand.
Although all three signed the instrument, the note was executed as a favor to Oscar Varona, with Victor Sevilla and Simeon Sadaya acting as accommodation makers who did not receive any actual proceeds.

The entire amount of the note (P15,000.00) was received exclusively by Oscar Varona from the bank.
Payments were intermittently made on account of the promissory note.
As of June 15, 1950, an outstanding balance of P4,850.00 remained unpaid.
On October 6, 1952, the bank collected from Simeon Sadaya the remaining balance along with accrued interest, bringing the total collected to P5,746.12.
Despite repeated demands, Oscar Varona failed to reimburse Simeon Sadaya for the payment made to the bank.

Victor Sevilla subsequently died, prompting the commencement of intestate estate proceedings in the Court of First Instance of Rizal, under Special Proceeding No. 1518.
Francisco Sevilla was appointed as the administrator of Victor Sevilla’s intestate estate.
In these proceedings, Simeon Sadaya filed a creditor's claim for the amount of P5,746.12 plus additional attorneys’ fees of P1,500.00.
The administrator contested the claim, arguing that the deceased had not received any monetary benefit from the promissory note and had signed solely as a surety for Oscar Varona.

The trial court, on June 5, 1957, issued an order admitting Sadaya’s claim against the intestate estate in the amount of P5,746.12 and directed payment from available estate funds.
The administrator, after a motion for reconsideration was overruled, escalated the matter on appeal.
The Court of Appeals, in its decision promulgated on July 15, 1960, set aside the trial court’s order and disallowed Sadaya’s claim against the estate.
The case reached the Supreme Court on certiorari, challenging the appellate decision regarding the right to reimbursement.

Whether signing the promissory note merely in favor of a third party (Oscar Varona) as an accommodation maker, without receiving any benefit, still imposes a joint and several liability on Victor Sevilla and Simeon Sadaya vis-à-vis the Bank of the Philippine Islands.
Whether such liability, though identical to that of Oscar Varona in relation to the bank, translates into an automatic entitlement among the co-makers for reimbursement after one has paid the creditor.

Whether there exists an implied contract or obligation of indemnity among the accommodation makers, which would obligate Oscar Varona to reimburse Simeon Sadaya after the latter paid the outstanding balance.
Whether the relation among the accommodation makers permits a claim for contribution from each co-maker relative to the quantum of payment made by one party.

Whether the payment made by Simeon Sadaya qualifies as a payment under the conditions that allow a joint and several accommodation maker to claim reimbursement from his co-makers, particularly in the light of Article 2073 of the Civil Code.
Whether the absence of a judicial demand or evidence of the principal debtor’s insolvency affects Sadaya’s right to seek contribution from Victor Sevilla.

Whether the joint and several liability owed to the bank necessarily entails a similar character of liability among the accommodation makers with respect to their mutual reimbursement obligations.
Whether principles of equity and the implied promise to share equally the burdens of the accommodation mandate an automatic right to seek contribution irrespective of procedural conditions.