CD: Astro Electronics v. PEFLGC

September 22, 2010 at 3:37 pm (2003, Case Digests) (, , )

ASTRO ELECTRONICS CORP. & PETER ROXAS v. PHILIPPINE EXPORT AND FOREIGN LOAN GUARANTEE CORPORATION
G.R. No. 136729 September 23, 2003
Austria-Martinez, J.

Doctrine:
Persons who write their names on the face of promissory notes are makers. Thus, even without the phrase “personal capacity,” a person who signs on the instrument twice will still be primarily liable as a joint and several debtor.

Facts:
Astro was granted several loans by the Philippine Trust Company (Philtrust) amounting to P3,000,000.00 with interest and secured by three promissory notes. In each of these promissory notes, it appears that petitioner Roxas signed twice, as President of Astro and in his personal capacity. Roxas also signed a Continuing Surety ship Agreement in favor of Philtrust Bank, as President of Astro and as surety.

Thereafter, Philguarantee, with the consent of Astro, guaranteed in favor of Philtrust the payment of 70% of Astro’s loan, subject to the condition that upon payment by Philguanrantee of said amount, it shall be proportionally subrogated to the rights of Philtrust against Astro. As a result of Astro’s failure to pay its loan obligations, despite demands, Philguarantee paid 70% of the guaranteed loan to Philtrust. Subsequently, Philguarantee filed against Astro and Roxas a complaint for sum of money with the RTC of Makati.

Roxas disclaims any liability on the instruments, alleging, inter alia, that he merely signed the same in blank and the phrases “in his personal capacity” and “in his official capacity” were fraudulently inserted without his knowledge.

The trial court ruled in favor of Philguarantee, stating that if Roxas really intended to sign the instruments merely in his capacity as President of Astro, then he should have signed only once in the promissory note. On appeal, the Court of Appeals affirmed the RTC decision.

Issue:
Whether or not Roxas should be solidarily liable with Astro for the sum awarded by the RTC

Held:
Yes. In signing his name aside from being the President of Astro, Roxas became a co-maker of the promissory notes and cannot escape any liability arising from it. Under the Negotiable Instruments Law, persons who write their names on the face of promissory notes are makers. Thus, even without the phrase “personal capacity,” Roxas will still be primarily liable as a joint and several debtor under the notes considering that his intention to be liable as such is manifested by the fact that he affixed his signature on each of the promissory notes twice which necessarily would imply that he is undertaking the obligation in two different capacities, official and personal.

Moreover, an instrument which begins with “I”, “We”, or “Either of us” promise to pay, when signed by two or more persons, makes them solidary liable (Republic Planters Bank vs. Court of Appeals, G.R. No. 93073, December 21, 1992). Having signed under such terms, Roxas assumed the solidary liability of a debtor and Philtrust Bank may choose to enforce the notes against him alone or jointly with Astro.

It devolves upon one to overcome the presumptions that private transactions are presumed to be fair and regular and that a person takes ordinary care of his concerns (Mendoza vs. Court of Appeals, G.R. No. 116710). Bare allegations, when unsubstantiated by evidence, documentary or otherwise, are not equivalent to proof under our Rules of Court (Coronel vs. Constantino, G.R. No. 121069, February 7, 2003). Since Roxas failed to prove the truth of his allegations that the phrases “in his personal capacity” and “in his official capacity” were inserted on the notes without his knowledge, said presumptions shall prevail over his claims.

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