Title
Associated Bank vs. Court of Appeals
Case
G.R. No. 123793
Decision Date
Jun 29, 1998
Associated Bank enforced a promissory note post-merger with CBTC; SC upheld its right, validating merger’s transfer of obligations.
Font Size:

Case Digest (G.R. No. 123793)

Facts:

  1. 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.
  2. 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.
  3. Outstanding Debt: Sarmiento failed to pay the full amount, leaving an outstanding balance of P2,250,000, excluding interest and other charges.
  4. 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.
  5. 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:

  1. 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).
  2. Whether the action is barred by prescription or laches.
  3. Whether the promissory note is a contract pour autrui (for the benefit of a third party).
  4. Whether there was a lack of consideration for the promissory note.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)


Jur is an AI-powered legal research platform in the Philippines for case digests, summaries, and jurisprudence. AI-generated content may contain inaccuracies; please verify independently.