Republic Planters Bank vs Court of Appeals

written by Howard

G.R. No. 93073 – 216 SCRA 738 – Mercantile Law – Negotiable Instruments Law – Negotiable Instruments in General – Signature of Makers

In 1979, World Garment Manufacturing, through its board authorized Shozo Yamaguchi (president) and Fermin Canlas (treasurer) to obtain credit facilities from Republic Planters Bank (RPB). For this, 9 promissory notes were executed. Each promissory note was uniformly written in the following manner:

___________, after date, for value received, I/we, jointly and severally promise to pay to the ORDER of the REPUBLIC PLANTERS BANK, at its office in Manila, Philippines, the sum of ___________ PESOS(….) Philippine Currency…

Please credit proceeds of this note to:

________ Savings Account ______XX Current Account

No. 1372-00257-6 of WORLDWIDE GARMENT MFG. CORP.

Sgd. Shozo Yamaguchi

Sgd. Fermin Canlas

The note became due and no payment was made. RPB eventually sued Yamaguchi and Canlas. Canlas, in his defense, averred that he should not be held personally liable for such authorized corporate acts that he performed inasmuch as he signed the promissory notes in his capacity as officer of the defunct Worldwide Garment Manufacturing.

ISSUE: Whether or not Canlas should be held liable for the promissory notes.

HELD: Yes. The solidary liability of private respondent Fermin Canlas is made clearer and certain, without reason for ambiguity, by the presence of the phrase “joint and several” as describing the unconditional promise to pay to the order of Republic Planters Bank. Where an instrument containing the words “I promise to pay” is signed by two or more persons, they are deemed to be jointly and severally liable thereon.

Canlas is solidarily liable on each of the promissory notes bearing his signature for the following reasons:

The promissory notes are negotiable instruments and must be governed by the Negotiable Instruments Law.

Under the Negotiable Instruments Law, persons who write their names on the face of promissory notes are makers and are liable as such.  By signing the notes, the maker promises to pay to the order of the payee or any holder according to the tenor thereof.

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Read another version of this digest here: Corporation Law; Change of Corporate Name