8/3/2019 ASTRO v Phil Export

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ASTRO ELECTRONICS CORP. & PETER ROXAS v.PHILIPPINE EXPORT AND FOREIGN LOANGUARANTEE CORPORATIONG.R. No. 136729 September 23, 2003

Doctrine: See Issue #2

Nature of the case: complaint for sum of money;petition for review on certiorari

Facts:

Astro was granted several loans by the PhilippineTrust Company (Philtrust) amounting toP3,000,000.00 with interest and secured by threepromissory notes totalling PHP 3M In each of thesepromissory notes, it appears that petitioner Roxassigned twice, as President of Astro and in hispersonal capacity. Roxas also signed a ContinuingSuretyship Agreement in favor of Philtrust Bank, asPresident of Astro and as surety.

Thereafter, Philguarantee, with the consent of Astro,guaranteed in favor of Philtrust the payment of70% of Astros loan, subject to the condition thatupon payment by Philguanrantee of said amount, itshall be proportionally subrogated to the rights ofPhiltrust against Astro. As a result of Astros failure topay its loan obligations, despite demands,Philguarantee paid 70% of the guaranteed loan toPhiltrust. Subsequently, Philguarantee filed againstAstro and Roxas a complaint for sum of money withthe RTC of Makati.

Roxas disclaims any liability on the instruments,alleging, inter alia, that he merely signed the same inblank and the phrases in his personal capacity andin his official capacity were fraudulently inserted

without his knowledge.

The trial court ruled in favor of Philguarantee, statingthat if Roxas really intended to sign the instrumentsmerely in his capacity as President of Astro, then heshould have signed only once in the promissory note.On appeal, the Court of Appeals affirmed the RTCdecision.

Issue:

1. WON Roxas should be jointly and severallyliable (solidary) with Astro for the sumawarded by the RTC? YES

2. WON Philguarantee may proceed against

Roxas? YES

Ratio:

1. Yes. In signing his name aside from beingthe President of Astro, Roxas became a co-maker of the promissory notes and cannotescape any liability arising from it. Underthe Negotiable Instruments Law, personswho write their names on the face of

promissory notes are makers. Thus, evenwithout the phrase personal capacity,Roxas will still be primarily liable as a jointand several debtor under the notesconsidering that his intention to be liable assuch is manifested by the fact that heaffixed his signature on each of thepromissory notes twice which necessarily

would imply that he is undertaking theobligation in two different capacities, officialand personal.

Moreover, an instrument which begins with I, We,or Either of us promise to pay, when signed by twoor more persons, makes them solidary. Havingsigned under such terms, Roxas assumed thesolidary liability of a debtor and Philtrust Bank maychoose to enforce the notes against him alone orjointly with Astro. Furthermore, since Roxas failed toprove the truth of his allegations that the phrases inhis personal capacity and in his official capacitywere inserted on the notes without his knowledge,said presumptions shall prevail over his claims. (labanalysis shows that signature was signed ON TOP of

typewritten letters)

2. Philguarantee has all the right to proceedagainst petitioner, it is subrogated to therights of Philtrust to demand for and collectpayment from both Roxas and Astro since italready paid the value of 70% of roxas andAstro Electronics Corp.s loan obligation. Incompliance with its contract of Guaranteein favor of Philtrust.

Subrogation is the transfer of all the rights of thecreditor to a third person, who substitutes him in allhis rights. It may either be legal or conventional.Legal subrogation is that which takes place without

agreement but by operation of law because ofcertain acts. Instances of legal subrogation are thoseprovided in Article 1302 of the Civil Code.Conventional subrogation, on the other hand, is thatwhich takes place by agreement of the parties.

Roxas acquiescence is not necessary for subrogationto take place because the instant case is one of thelegal subrogation that occurs by operation of law,and without need of the debtors knowledge. Further,Philguarantee, as guarantor, became the transfereeof all the rights of Philtrust as against Roxas andAstro because the guarantor who pays issubrogated by virtue thereof to all the rights whichthe creditor had against the debtor.

Decision: Petition denied