Case Digest (G.R. No. 123793)
Facts:
The case involves Associated Bank as the petitioner and Lorenzo Sarmiento Jr. as the respondent. The events leading to the case began with the merger of Associated Banking Corporation and Citizens Bank and Trust Company on September 16, 1975, resulting in the formation of Associated Citizens Bank, which later changed its name to Associated Bank on March 10, 1981. On September 7, 1977, Sarmiento executed a promissory note in favor of Citizens Bank for the amount of P2,500,000, which was due on March 6, 1978, with an interest rate of 14% per annum. Despite several demands for payment, Sarmiento failed to settle his obligation, leaving an outstanding balance of P2,250,000, excluding interest and other charges.
In the Regional Trial Court of Manila, Branch 48, the trial court ruled in favor of Associated Bank on October 17, 1986, ordering Sarmiento to pay the outstanding amount along with interest and attorney's fees. However, Sarmiento contested the ruling, claiming that ...
Case Digest (G.R. No. 123793)
Facts:
- Merger of Banks: On September 16, 1975, Associated Banking Corporation (ABC) and Citizens Bank and Trust Company (CBTC) merged to form Associated Citizens Bank, which later changed its name to Associated Bank.
- Promissory Note: On September 7, 1977, Lorenzo Sarmiento Jr. executed a promissory note in favor of CBTC for P2,500,000, payable on or before March 6, 1978, with interest and penalties.
- Outstanding Debt: Sarmiento failed to pay the full amount, leaving an outstanding balance of P2,250,000, excluding interest and other charges.
- Legal Action: Associated Bank filed a complaint against Sarmiento for the unpaid amount, which the Regional Trial Court (RTC) ruled in favor of the bank.
- Appeal: Sarmiento appealed, arguing that Associated Bank had no cause of action since the promissory note was executed in favor of CBTC, which was already absorbed by the merger. The Court of Appeals reversed the RTC decision, dismissing the complaint.
Issue:
- Whether Associated Bank, as the surviving corporation, can enforce the promissory note executed in favor of CBTC after the merger agreement but before the issuance of the certificate of merger by the Securities and Exchange Commission (SEC).
- Whether the action is barred by prescription or laches.
- Whether the promissory note is a contract pour autrui (for the benefit of a third party).
- Whether there was a lack of consideration for the promissory note.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)