Tomas Ang v. Associated Bank

Summary

This case involves a collection suit by Associated Bank against Antonio Ang Eng Liong (principal debtor) and Tomas Ang (accommodation party/co-maker) on two promissory notes totaling P80,000 from 1978. The trial court initially dismissed the case finding the bank lacked standing as the notes were held by Asset Privatization Trust. The Court of Appeals reversed, and the Supreme Court affirmed, holding that the bank's subsequent buy-back in 1993 restored its holder status. The Court clarified that accommodation parties who agree to solidary liability cannot escape payment obligations even without receiving consideration, distinguishing suretyship from guaranty contracts. The decision reinforces that accommodation parties are primarily and unconditionally liable to holders for value under the Negotiable Instruments Law, and that procedural lapses in serving co-debtors do not discharge solidary obligations. This case provides important guidance on accommodation party liability, holder status in negotiable instruments, and the distinction between guaranty and suretyship contracts in Philippine commercial law.