Accommodation Party

September 7, 2010 at 9:39 am (Legal Definitions) (, , )

Today, the Philippine Daily Inquirer (PDI) reported actor Deither “Diet” Ocampo, together with his partner and a publishing company, being sued for alleged non-payment of debts amounting to over Php. 3.6 million.

In the article, the PDI defined an accommodation party using the internet as a source. The website from which the definition was gathered was not identified.

Now, what is an accommodation party under Philippine jurisprudence?

Section 29 of the Negotiable Instruments Law provides for the definition of an accommodation party:

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.

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