G.R. No. 146511 . September 5, 2007.
Tomas Ang, petitioner, vs. Associated Bank and Antonio Ang Eng Liong, respondents.

FACTS

Respondent Associated Bank filed a collection suit against Antonio Ang Eng Liong as principal debtor and petitioner Tomas Ang as co-maker for two promissory notes dated 1978 totaling P80,000. The bank demanded payment of the principal plus accumulated interest, service charges, penalty charges, and attorney’s fees, amounting to over P539,000 by 1990. Antonio Ang Eng Liong admitted the loan but contested the reasonableness of the charges. Tomas Ang, in his answer, claimed he was merely an accommodation party who signed blank promissory notes without receiving any value. He asserted that one note for P50,000 was completed contrary to his authority, which was only for a P30,000 loan, and that his signature on the second note was procured through fraud. He also raised defenses including that the bank was not a holder in due course and that the notes were impaired due to lack of presentment and unreasonable delay in demand.

ISSUE

The core issue is whether petitioner Tomas Ang, as an accommodation party, is liable to respondent bank for the amounts due under the promissory notes.

RULING

Yes, the Supreme Court affirmed the Court of Appeals’ decision holding Tomas Ang solidarily liable. As an accommodation maker, Tomas Ang is a solidary debtor under Section 29 of the Negotiable Instruments Law (NIL). His liability to a holder for value, such as the respondent bank, is primary and absolute, irrespective of any lack of consideration received by him or the bank’s knowledge of his accommodation status. His defenses of having signed in blank and excess of authority are unavailing against the bank. Under Section 14 of the NIL, a holder prima facie has authority to complete a blank instrument, and a signer is presumed to have acted with care and knowledge of the instrument’s contents. His claim that the P50,000 note exceeded his P30,000 authority is a matter between him and the accommodated party (Antonio Ang Eng Liong), not a defense against the bank. The Court found no conclusive evidence of fraud in the second note’s execution. Furthermore, the defenses of non-presentment and delay in making demand were waived by the stipulations in the notes themselves. The modifications to the interest and charges were deemed amendments consented to by the act of signing the disclosure statements. Consequently, as an accommodation party, Tomas Ang is liable for the loan obligation, subject to a recomputation to ensure the interest and charges are not unconscionable.