Case Digest (G.R. No. 17230)
Facts:
Plaintiff Jose Velasco sued defendants Tan Liuuan & Co., Tan Liuuan, Uy Tengpiao, and Aw Yong Chiow Soo. In 1919 Tan Liuuan & Co. executed four promissory notes to Aw Yong Chiow Soo (P12,000 dated Feb. 18; P16,000 dated Feb. 23; P38,000 dated Mar. 17; P21,000 dated Mar. 27), each payable six months after date; on Mar. 17 Aw Yong Chiow Soo drew a sight draft for 33,500 Yen on Jing Kee & Co., which the Philippine National Bank cashed after Velasco indorsed it, the draft was later dishonored, and Velasco executed a note to the bank. By written instruments of Aug. 18 and Aug. 22, 1919, Tan Liuuan & Co. promised to reimburse Velasco, Velasco acknowledged receipt of the four notes as collateral, and Aw Yong Chiow Soo assigned and unqualifiedly indorsed the four notes to Velasco; Velasco sued on Feb. 19, 1920; the trial court awarded judgment against Tan Liuuan & Co. and others and limited Velasco's recovery to P46,135.70 as indemnity, with remainder to Aw Yong Chiow Soo if collected Case Digest (G.R. No. 17230)
Facts:
- Background of the transaction
- Jose Velasco (Plaintiff) and defendants Tan Liuan & Co., Tan Liuan, Uy Tengpiao, and Aw Yong Chiow Soo are the parties.
- Tan Liuan & Co. executed four promissory notes in favor of Aw Yong Chiow Soo: (a) P12,000 dated February 18, 1919; (b) P16,000 dated February 23, 1919; (c) P38,000 dated March 17, 1919; and (d) P21,000 dated March 27, 1919; each payable six months after date.
- On March 17, 1919, Aw Yong Chiow Soo drew a sight draft for 33,500 Yen on Jing Kee & Co., Kobe, in favor of the Philippine National Bank.
- The Philippine National Bank at first refused to cash the draft; the bank later required an indorser, and Jose Velasco endorsed the draft; the bank cashed the draft and plaintiff received no part of the proceeds, which were claimed to have been paid to Tan Liuan & Co..
- The draft was dishonored in the ordinary course of business; the bank later required and the plaintiff executed a promissory note to the Philippine National Bank for the amount of the draft, interest, and expenses.
- Written instruments and assignments
- August 18, 1919, Tan Liuan made a written promise to pay Jose Velasco within ten days after plaintiff became obligated to pay the draft, including costs, expenses and attorney's fees, with interest at 10% per annum.
- On the same day, Jose Velasco executed a written statement acknowledging receipt from Aw Yong Chiow Soo of the four promissory notes as collateral security for his indorsement of the draft, agreeing to reassign the notes to Aw Yong Chiow Soo if the draft were paid and to remit any surplus to Aw Yong Chiow Soo if plaintiff paid the draft.
- August 22, 1919, Aw Yong Chiow Soo executed a written assignment to Jose Velasco of its credit against Tan Liuan & Co., described as the four promissory notes aggregating eighty-seven thousand pesos (P87,000), and concurrently indorsed the notes unqualifiedly to the plaintiff.
- Pleadings, trial and lower court disposition
- Jose Velasco commenced this action on February 19, 1920, alleging execution of the notes by Tan Liuan & Co., indorsement by Aw Yong Chiow Soo to plaintiff, due presentment, refusal to pay, and notice of dishonor.
- Aw Yong Chiow Soo filed a general denial and a separate defense alleging: the draft was accommodation only; plaintiff indorsed the draft at bank's request after agreement with Aw Yong Chiow Soo; Aw Yong Chiow Soo delivered the draft proceeds to Tan Liuan & Co.; Tan Liuan...(Subscriber-Only)
Issues:
- Primary legal questions presented on appeal
- Whether Aw Yong Chiow Soo, as an unqualified indorser of the four promissory notes, is liable to Jose Velasco on those notes.
- Whether parol evidence or the written statements of August 18 and August 22, 1919, may be admitted to vary or defeat the legal liability arising from the unqualified indorsement.
- Whether the insolvency of Tan Liuan & Co., prior protest of some notes, and the alleged agreement for collateral assignment and reimbursement operate to discharge or limit the ...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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