Case Summary (G.R. No. 138894)
Payment Obligations and Claims
Oscar Varona received the entire amount of the loan but Victor Sevilla and Simeon Sadaya signed the promissory note solely to accommodate Varona, without receiving any value from the transaction. While payments were made, by June 15, 1950, an outstanding balance of P4,850.00 remained, which the bank collected from Sadaya on October 6, 1952, totaling P5,746.12 including interest. Following Varona's failure to reimburse Sadaya despite multiple demands, Victor Sevilla passed away, prompting intestate proceedings in which Sadaya made a claim as a creditor against Sevilla's estate.
Denial of Claim by Estate Administrator
The administrator of Victor Sevilla’s estate resisted Sadaya's claim, arguing that Sevilla had not received consideration and was merely a surety for Varona. However, the trial court admitted Sadaya's claim for P5,746.12, ordering the administrator to pay from any available estate funds. This order was later challenged by the administrator in the Court of Appeals, which reversed the trial court's ruling by disallowing Sadaya’s claim.
Legal Basis for Joint Liability
The Supreme Court reiterated that both Victor Sevilla and Simeon Sadaya were joint and several accommodation makers on the promissory note. Their obligations to the bank were bound together with Varona. Although Sevilla and Sadaya did not benefit from the loan, their liability remained intact as defined in the promissory note. Thus, the bank had the right to pursue collection against either of the accommodation makers.
Right to Reimbursement
The Court emphasized that Sadaya, who paid the bank, had a right to seek reimbursement from Varona. This right arises from the principle of indemnity, where it is implied that Varona, having received the loan proceeds, is obligated to reimburse Sadaya, who covered the debt. The legal relationship among the three obligors was defined by their obligations to one another and to the bank as joint and several obligors while their recourse against each other is governed by specific legal provisions.
Conditions for Contribution Among Co-Obligors
The Court analyzed that under the Civil Code, one accommodation maker can only demand reimbursement from a co-accommodation maker under specified conditions
...continue readingCase Syllabus (G.R. No. 138894)
Case Background
- On March 28, 1949, Victor Sevilla, Oscar Varona, and Simeon Sadaya executed a promissory note for P15,000.00 in favor of the Bank of the Philippine Islands, with an interest rate of 8% per annum, payable on demand.
- Oscar Varona was the sole recipient of the P15,000.00 from the bank, while Victor Sevilla and Simeon Sadaya signed as co-makers purely as a favor to Varona.
- Payments were made against the promissory note, leaving an outstanding balance of P4,850.00 as of June 15, 1950.
- On October 6, 1952, the bank collected this outstanding balance from Sadaya, amounting to P5,746.12 with interest.
- Varona did not reimburse Sadaya despite multiple demands.
- Victor Sevilla passed away, prompting intestate estate proceedings in the Court of First Instance of Rizal, with Francisco Sevilla appointed as the administrator.
- Sadaya filed a creditor's claim for P5,746.12, plus P1,500.00 for attorney's fees. The administrator contested the claim, arguing that Victor Sevilla did not receive any consideration for the promissory note and was merely a surety.
- The trial court admitted Sadaya's claim, leading to an appeal from the administrator.
Court of Appeals Decision
- On July 15, 1960, the Court of Appeals overturned the trial court’s order and disallowed Sadaya's claim against the intestate estate.
- The case was then brought before the Supreme Court for certiorari to review the appellate court's judgment.
- S