ROBERT T. UY, PETITIONER, VS. ROMY CUA AND PATRICK ANTONIO, RESPONDENTS.
GAERLAN, S.H., J.:
of the Regional Trial Court (RTC), Branch 19, of Cauayan, Isabela in
Civil Case No. Br. 19-2780. The assailed Decision is a modification of
the 8 November 2007 Decision[4]
of the Municipal Trial Court in Cities (MTCC) of Cauayan, Isabela in an
action for collection of sum of money docketed as Civil Case No.
CV-02-040 wherein the RTC absolved herein respondent Romy Cua of any
civil liability. The questioned Order is a denial of the Motion for
Reconsideration[5] filed by the petitioner Robert T. Uy.
The facts are as follows:
In his verified complaint,[6]
Robert T. Uy (Uy) alleged that sometime in 19 September 1998, herein
respondents Romy Cua (Cua) and Patrick Antonio (Antonio) borrowed the
amount of Two Hundred Thousand Pesos (Php 200,000.00) from him. In turn,
Antonio issued Consolbank Check No. 0112316 (subject check) in the
amount of Php 200,000.00, postdated 19 October 1998, which was indorsed
by Cua. However, upon presentment, the check was dishonored by the
drawee bank as the account from which it was drawn was already closed.
Despite repeated demands, Cua and Antonio failed and refused to settle
their obligation which prompted Uy to file an action for collection of
sum of money against them.
In his answer,[7]
Antonio averred as affirmative defense that he did not issue the subject
check to Uy and that the case was filed merely to harass him.
Meanwhile, in Cua’s answer,[8]
he stated that Uy is engaged in the business of extending loans.
However, Uy would not grant Antonio a loan unless he could present
someone he knows who is also known to Uy. Cua maintained that he did not
borrow any amount from Uy. According to him, Antonio is merely an
acquaintance who approached and asked him if he could sign a postdated
check to be delivered by Antonio to Uy as security for the payment of a
loan in the amount of Php 200,000.00. Cua signed the dorsal portion of
the subject check to accommodate Antonio. Nonetheless, he does not have
any knowledge if Antonio was actually able to obtain a loan from Uy
thereafter. Cua insisted that he refused to pay the amount of the
subject check since it does not belong to him. It is also his
postulation that his signature at the reverse side of the subject check
does not make him an indorser thereof. He emphasized that Uy is the
payee of the check and it was not indorsed to him, thus, he had no
personality to subsequently indorse the same.
In its 8 November 2007 Decision,[9] the MTCC wrote, to wit:
xxx
From the evidence of the plaintiff, it appears that on September
19, 1998, defendants Romy Cua and Patrick Antonio went to the plaintiff
at Cauayan City. They offered a check for rediscounting. The check was
owned by defendant Antonio, but it was defendant Cua who gave to the
plaintiff the check. As plaintiff knew very well defendant Cua, he
agreed to rediscount the check deducting 4% as interest. Plaintiff gave
the money to defendant Cua because he was the one with whom he made the
transaction although defendant Antonio was there when the transaction
was made. The check in the amount of Php200,000.00 was postdated to
October 19, 1998, payable to Robert T. Uy, plaintiff. Defendant Cua
signed at the back of the check to show that he received the
Php200,000.00.The check was dishonored by the bank. Plaintiff demanded payment
from the defendants, but they did not pay. Plaintiff engaged the
services of counsel who filed the case in Court for a fee equivalent to
10% of Php200.00.00, plus Php1,000.00 per appearance in Court.Plaintiff offered in evidence the check marked as Exhibit “A”,
with submarkings, Demand Letters to defendants Cua and Antonio, marked
as Exhibits “B” and “C”, respectively, Savings Account Deposit Slip as
Exhibit “D” and Debit Advice as Exhibit “E”, both of RCBC bank.On the other hand, the evidence of the defendant Cua shows that
he knows the defendant Antonio. In 1998, Antonio went to Cua at his
office and asked the latter if he knows plaintiff Uy. Cua said yes and
asked Antonio, why? Antonio told Cua that he wanted to borrow money from
the plaintiff, but the plaintiff did not know him. Plaintiff asked
Antonio if he knew one from Cauayan City and Antonio said, he knew Romy
Cua.Antonio asked Cua if could sign the check that would prove that
he, Cua, knew Antonio. Cua obliged. He signed the check in the amount of
Php200,000.00, payable to Robert Uy (Exhibit “1”). Cua signed at the
back of the check (Exhibit “1-C”). Cua did not receive any portion of
the money. He declared that he did not borrow any money from the
plaintiff. If he needed money, he had a credit line with Metrobank for
eleven million pesos. He has also friends, brothers and sisters who
could lend him if he needed money.As for defendant Patrick Antonio, he testified in Court saying
that he did not receive from the plaintiff the Php200,000.00 subject
matter of this case.
xxx[10]
Unsatisfied with the ruling of the MTCC, Cua moved for
reconsideration thereof while Antonio appealed therefrom. Nevertheless,
in its 2 January 2008 Order,[11] the MTCC denied Cua’s Motion for Reconsideration. Consequently, Cua likewise filed an Appeal.
In its 28 July 2009 Decision,[12] the RTC modified the 8 November 2007 Decision of the MTCC[13] and disposed of in this wise:
WHEREFORE, in view of the foregoing
consideration, the Decision of the lower court dated 8 November 2007 is
hereby MODIFIED with regard to defendant-appellant ROMY CUA who is
accordingly absolved of any civil liability.[14]
In absolving Cua of any civil liability, the RTC ruled that the
signature of the former on the dorsal portion of the subject check did
not make him an indorser thereof. According to the RTC, Cua had no
personality to indorse the subject check as it was never indorsed to him
by the payee. As such, the RTC gave credence to Cua’s claim that he
signed the subject check only to accommodate Antonio and not to make
himself solidarily liable with said acquaintance.
Aggrieved, Uy moved for reconsideration[15] of the RTC Decision which was denied by the said Court in its 10 May 2011 Order.[16] Hence, Uy is before this Court with the sole issue of:
WHETHER OR NOT THE REGIONAL TRIAL COURT
ERRED IN RULING THAT ONLY DEFENDANT PATRICK ANTONIO SHOULD BE HELD
LIABLE FOR THE CHECK AND ABSOLVING DEFENDANT CUA OF ANY LIABILITY AS HE
MERELY SIGNED THE CHECK TO ACCOMMODATE DEFENDANT PATRICK ANTONIO.[17]
Uy is of the position that as an accommodation party, Cua is likewise liable to him.
The instant petition is meritorious.
The accepted rule is that the negotiability or
non-negotiability of an instrument is determined from the writing, that
is, from the face of the instrument itself. In the construction of a
bill or note, the intention of the parties is to control, if it can be
legally ascertained.[18]
While the writing may be read in the light of surrounding circumstances
in order to more perfectly understand the intent and meaning of the
parties, yet as they have constituted the writing to be the only outward
and visible expression of their meaning, no other words are to be added
to it or substituted in its stead. The duty of the Court in such case
is to ascertain, not what the parties may have secretly intended as
contradistinguished from what their words express, but what is the
meaning of the words they have used. What the parties meant must be
determined by what they said.[19]
The provisions of the Negotiable Instruments Law (NIL) can be applied only to negotiable instruments.[20]
Under Section 1 of the NIL, an instrument to be negotiable must conform
to the following requirements: (a) It must be in writing and signed by
the maker or drawer; (b) Must contain an unconditional promise or order
to pay a sum certain in money; (c) Must be payable on demand, or at a
fixed or determinable future time; (d) Must be payable to order or to
bearer; and (e) Where the instrument is addressed to a drawee, he must
be named or otherwise indicated therein with reasonable certainty.
A check is a negotiable instrument that serves as a substitute
for money and as a convenient form of payment in financial transactions
and obligations.[21] Section
185 of the NIL defines a check as “a bill of exchange drawn on a bank
payable on demand,” while Section 126 of the said law defines a bill of
exchange as “an unconditional order in writing addressed by one person
to another, signed by the person giving it, requiring the person to whom
it is addressed to pay on demand or at a fixed or determinable future
time a sum certain in money to order or to bearer.”[22]
As the instrument subject of this case is a negotiable instrument, this Court shall apply the provisions of the NIL.
Section 63 of the NIL states that:
Section 63. When a person deemed indorser.
– A person placing his signature upon an instrument otherwise than as a
maker, drawer, or acceptor, is deemed to be indorser unless he clearly
indicates by appropriate words his intention to be bound in some other
capacity.
Additionally, Section 29 of the NIL provides that:
Sec. 29. Liability of accommodation party.
– An accommodation party is one who has signed the instrument as maker,
drawer, acceptor, or indorser, without receiving value therefor, and
for the purpose of lending his name to some other person. Such a person
is liable on the instrument to a holder for value, notwithstanding such
holder, at the time of taking the instrument, knew him to be only an
accommodation party.
A maker is the one who makes a promissory note and promises to pay the amount stated therein.[23] A drawer is the person who draws the bill of exchange and orders the drawee to pay a sum certain in money.[24] A drawee is to whom the order to pay is addressed in a bill of exchange.[25] On the other hand, an acceptor is a drawee who accepts the order to pay made by the drawer.[26]
Obviously, in this case, Cua signed the subject check not as a maker,
drawer, or acceptor thereof. There was likewise no clear indication by
any appropriate word in the subject check of his intention to be bound
in some other capacity.[27] Applying Section 63 of the NIL, Cua is deemed to be the indorser of the subject check.
Now, can Cua be considered as an accommodation party as described in Section 29 of the NIL?
This Court answers in the affirmative. An accommodation party
is one who meets all the three requisites, namely: (1) he must be a
party to the instrument, signing as maker, drawer, acceptor, or
indorser; (2) he must not receive value therefor; and (3) he must sign
for the purpose of lending his name or credit to some other person.[28]
As earlier discussed, Cua is deemed as an indorser pursuant to Section
63 of the NIL. More importantly, as repeatedly insisted by Cua, he did
not receive any value therefor and he signed the subject check merely to
lend his name to Antonio so that the latter may obtain a loan from Uy.
Being an accommodation party, Cua is considered in law as the
same party as Antonio in relation to whatever is adjudged touching the
obligation of the latter since their liabilities are interwoven as to be
inseparable.[29]
The accommodation party is liable on the instrument to a
holder for value even though the holder, at the time of taking the
instrument, knew him or her to be merely an accommodation party, as if
the contract was not for accommodation.[30]
The relation between an accommodation party and the party accommodated
is, in effect, one of principal and surety — the accommodation party
being the surety. It is a settled rule that a surety is bound equally
and absolutely with the principal and is deemed an original promisor and
debtor from the beginning. The liability is immediate and direct. It is
not a valid defense that the accommodation party did not receive any
valuable consideration when he executed the instrument; nor is it
correct to say that the holder for value is not a holder in due course
merely because at the time he acquired the instrument, he knew that the
indorser was only an accommodation party.[31]
On a final note, Cua is presumed to have taken ordinary care
of his concerns. The natural presumption is that one does not sign a
document without first informing himself of its contents and
consequences.[32]
All told, it is evident from the provisions above cited and
the discussions made that Cua cannot escape liability on the ground that
he merely accommodated Antonio and that he did not benefit from the
transaction for which he is being made liable. As such, this Court finds
that the RTC erred in absolving Cua of any civil liability.
WHEREFORE, premises considered, the instant Petition for Review is hereby GRANTED.
Accordingly, the 28 July 2009 Decision and the 10 May 2011 Order of the
Regional Trial Court (RTC), Branch 19, of Cauayan, Isabela in Civil
Case No. Br. 19-2780 insofar as it absolved Romy Cua of civil liability
is REVERSED AND SET ASIDE.
SO ORDERED.
Bruselas, Jr.,[*] (Acting Chairperson) and Macalino,[**] JJ., concur.
[*] Acting Chairperson, per Office Order No. 156-14-AGT, dated April 23, 2014
[**] Acting Senior Member, per Office Order No. 156-14-AGT, dated April 23, 2014
[1] Rollo, pp. 10-24
[2] Rollo, pp. 25-29
[3] Rollo, p. 30
[4] Rollo, pp. 31-34
[5] Rollo, pp. 75-80
[6] Rollo, pp. 37-38
[7] Rollo, pp. 39-41
[8] Rollo, pp. 42-50
[9] Supra, note no. 4
[10] Supra, note no. 4, pp. 31-32
[11] Rollo, pp. 35-36
[12] Supra, note no. 2
[13] Supra, note no. 4
[14] Ibid, p. 29
[15] Supra, note no.5
[16] Supra, note no. 3
[17] Supra, note no.1, p. 17
[18] Caltex (Philippines), Inc. vs. Court of Appeals and Security Bank and Trust Company, G.R. No. 97753, August 10, 1992
[19] Traders Royal Bank
vs. Court of Appeals, Filriters Guaranty Assurance Corporation and
Central Bank of the Philippines, G.R. No. 93397, March 3, 1997, citing
the case of Caltex (Philippines), Inc. vs. Court of Appeals and Security
Bank and Trust Company, G.R. No. 97753, August 10, 1992
[20] Sundiang Jose, R.
and Aquino, Timoteo B. Reviewer on Commercial Law, 2006 Ed., p. 81,
citing GSIS vs. Court of Appeals, 170 SCRA 533 [1989]; Kauffman vs. PNB,
42 Phil. 182 [1921]
[21] Eumelia R. Mitra vs. People of the Philippines and Felicisimo S. Tarcelo, G.R. No. 191404, July 05, 2010
[22] Fideliza J. Aglibot vs. Ingersol L. Santia, G.R. No. 185945, December 5, 2012
[23] Supra, note no. 20, p. 87
[24] Ibid
[25] Supra, note no. 20, p. 87
[26] Supra, note no. 20, p. 88
[27] Section 63 of the NIL
[28] Tomas Ang vs. Associated Bank and Antonio Ang Eng Liong, G.R. No. 146511, September 5, 2007
[29] Eusebio Gonzales
vs. Philippine Commercial and International Bank, Edna Ocampo, and
Roberto Noceda, G.R. No. 180257, February 23, 2011, citing Tomas Ang vs.
Associated Bank and Antonio Ang Eng Liong, G.R. No. 146511, September
5, 2007
[30] Ibid
[31] Supra, note no. 22
[32] Spouses Rodelio and Alicia Poltan vs. BPI Family Savings Bank, Inc. and John Doe, G.R. No. 164307, March 5, 2007