Case Summary (G.R. No. 136729)
Facts
Astro Electronics Corp. obtained loans totaling ₱3,000,000 from Philtrust Bank, secured by three promissory notes:
- PN No. PFX-254 (₱600,000) dated December 14, 1981
- PN No. PFX-258 (₱400,000) dated December 14, 1981
- PN No. 15477 (₱2,000,000) dated August 27, 1981
Each note bears two signatures of Peter T. Roxas—once as President of Astro and once in his personal capacity. Roxas also executed a Continuing Suretyship Agreement guaranteeing the full ₱3,000,000 joint and several with Astro. Philguarantee, with Astro’s consent, guaranteed 70% of the loan to Philtrust Bank, undertaking subrogation rights upon payment. When Astro defaulted, Philguarantee paid 70% of the obligation and sued Astro and Roxas for the remaining sum.
Trial Court Decision
The Regional Trial Court rendered judgment for Philguarantee, ordering Astro and Roxas to pay jointly and severally ₱3,621,187.52 plus 16% interest per annum from January 1, 1985, until full payment, and costs. The RTC held that Roxas’s double signature manifested his intention to incur personal liability.
Court of Appeals Ruling
The Court of Appeals affirmed, emphasizing the presumption that private agreements are fair and regular and noting that Roxas failed to explain why he signed twice. His denial of personal liability, based on alleged fraudulent insertion of the words “in his personal capacity,” was unsubstantiated.
Issue
Whether Peter T. Roxas is solidarily liable with Astro Electronics Corp. for the amount due under the promissory notes guaranteed by Philguarantee.
Liability under the Negotiable Instruments Law
Under Section 184 of the Negotiable Instruments Law, any person signing a promissory note as “maker” promises to pay according to its tenor. Each note unambiguously states: “FOR VALUE RECEIVED, I/We jointly, severally and solidarily, promise to pay to PHILTRUST BANK or order….” A signature by two or more persons on an instrument containing such language creates solidary liability. Roxas’s two signatures—once as corporate president and once personally—make him a co-maker and jointly and severally liable.
Presumptions and Evidentiary Burden
Roxas alleged he signed blank forms and that “in his personal capacity” was fraudulently inserted. The Supreme Court found the signatures overlie the typewritten words, disproving Roxas’s claim. Under Rule 131, Section 3(p) and (d), private transactions are presumed fair and regular, and individuals are presumed to exercise ordinary care. Roxas offered no credible evidence to rebut these presumptions. His bare, self-serving allegations failed to meet the burden of proof.
...continue readingCase Syllabus (G.R. No. 136729)
Facts
- Astro Electronics Corp. (“Astro”) obtained several loans from Philippine Trust Company (Philtrust) totaling ₱3,000,000.00.
- The loans were evidenced by three promissory notes:
• PN No. PFX-254 (₱600,000.00) dated December 14, 1981
• PN No. PFX-258 (₱400,000.00) dated December 14, 1981
• PN No. 15477 (₱2,000,000.00) dated August 27, 1981 - Peter Roxas signed each note twice: once as President of Astro and once in his personal capacity.
- Roxas also executed a Continuing Suretyship Agreement on July 31, 1981, binding himself as surety alongside Astro for the ₱3,000,000.00 obligation.
Guarantee by Philguarantee and Subrogation
- Philippine Export and Foreign Loan Guarantee Corporation (Philguarantee), with Astro’s consent, guaranteed 70% of Astro’s loan obligation to Philtrust.
- Under the guarantee contract, Philguarantee agreed to pay 70% of the loan and, upon payment, to be subrogated to Philtrust’s rights against Astro and Roxas.
Default and Payment
- Astro defaulted on its loan obligations despite demands for payment.
- Philguarantee honored the guarantee and paid 70% of the guaranteed loans to Philtrust.
Trial Court Decision
- Philguarantee filed a complaint for sum of money against Astro and Roxas in the Regional Trial Court (RTC) of Makati, Branch 147.
- Roxas, in his Answer, disclaimed personal liability, alleging he signed in blank and that the phrases “in his personal capacity” and “in his official capacity” were fraudulently inserted.
- RTC rendered judgment in favor of