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Submitted by: Alfredo S.

Amindalan
Section 2C

Republic Planters Bank vs. CA


216 SCRA 738

FACTS:

Yamaguchi and Canlas are officers of the Worldwide Garment


Manufacturing, which later changed its name to Pinch Manufacturing. They were
authorized to apply for credit facilities with the petitioner bank. The two officers
signed the promissory notes issued to secure the payment of the obligations.
Later, the bank instituted an action for collection of money, impleading also
the two officers. The trial court held the two officers personally liable also.

HELD:

Canlass is solidarily liable on each of the promissory notes to which his


signature appears. The promissory notes in question are negotiable
instruments and thus, governed by the Negotiable Instruments Law.

Under the Negotiable Instruments Law, persons who write their names in the
instrument are makers are liable as such. By signing the note, the maker promises
to pay to the order of the payee or any holder the tenor of the obligation. Based on
the above provisions of the law, there is no denying that Canlass is one of the co-
makers of the promissory note
216 SCRA 738 Mercantile 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 lnstruments 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.

Spouses Eduardo and Epifania Evangelista vs Mercator Financing Co.

(GR No 148864, Aug 21, 2003, Puno)

The promissory not in question is worded as follows:

For value received, I/we jointly and severally promise to pay to the order of
Mercator Financing Company ..

Are the spouses jointly and severally liable?

The SC held that under Section 17 (g) of the NIL and Article 1216 of the Civil Code,
where the promissory note was executed jointly and severally by two or more
persons, the payee of the promissory note had the right to hold any one of the two
(2) signers of the promissory note responsible for the payment of the whole amount
of the note.

CASE DIGEST: NEGOTIABLE INSTRUMENTS LAW


CASE DIGEST: NEGOTIABLE INSTRUMENTS LAW

PHILIPPINE NATIONAL BANK VS. COURT OF APPEALS

GR. NO. 107508 April 25, 1996

1st Division Kapunan

FACTS:

Ministry of Education Culture issued a check payable to Abante Marketing and


drawn against Philippine National Bank (PNB). Abante Marketing, deposited the
questioned check in its savings account with Capitol City Development Bank
(CAPITOL). In turn, Capitol deposited the same in its account with the Philippine
Bank of Communications (PBCom) which, in turn, sent the check to PNB for clearing.
PNB cleared the check as good and thereafter, PBCom credited Capitol's account for
the amount stated in the check. However, PNB returned the check to PBCom and
debited PBCom's account for the amount covered by the check, the reason being
that there was a "material alteration" of the check number. PBCom, as collecting
agent of Capitol, then proceeded to debit the latter's account for the same amount,
and subsequently, sent the check back to petitioner. PNB, however, returned the
check to PBCom. On the other hand, Capitol could not in turn, debit Abante
Marketing's account since the latter had already withdrawn the amount of the
check. Capitol sought clarification from PBCom and demanded the re-crediting of
the amount. PBCom followed suit by requesting an explanation and re-crediting
from PNB. Since the demands of Capitol were not heeded, it filed a civil suit against
PBCom which in turn, filed a third-party complaint against PNB for
reimbursement/indemnity with respect to the claims of Capitol. PNB, on its part,
filed a fourth-party complaint against Abante Marketing.

The Trial Court rendered its decision, ordering PBCom to re-credit or reimburse; PNB
to reimburse and indemnify PBCom for whatever amount PBCom pays to Capitol;
Abante Marketing to reimburse and indemnify PNB for whatever amount PNB pays
to PBCom. The court dismissed the counterclaims of PBCom and PNB. The appellate
court modified the appealed judgment by ordering PNB to honor the check. After the
check shall have been honored by PNB, the court ordered PBCom to re-credit
Capitol's account with it the amount. PNB filed the petition for review on certiorari
averring that under Section 125 of the NIL, any change that alters the effect of the
instrument is a material alteration.
ISSUE:

WON an alteration of the serial number of a check is a material alteration under the
NIL.

HELD:

NO, alteration of a serial number of a check is not a material alteration


contemplated under Sec. 125 of the NIL.

RATIO:

An alteration is said to be material if it alters the effect of the instrument. It means


an unauthorized change in an instrument that purports to modify in any respect the
obligation of a party or an unauthorized addition of words or numbers or other
change to an incomplete instrument relating to the obligation of a party. In other
words, a material alteration is one which changes the items which are required to
be stated under Section 1 of the Negotiable Instruments Law.

In the present case what was altered is the serial number of the check in question,
an item which is not an essential requisite for negotiability under Section 1 of the
Negotiable Instruments Law. The aforementioned alteration did not change the
relations between the parties. The name of the drawer and the drawee were not
altered. The intended payee was the same. The sum of money due to the payee
remained the same. The check's serial number is not the sole indication of its origin.
The name of the government agency which issued the subject check was
prominently printed therein. The check's issuer was therefore insufficiently
identified, rendering the referral to the serial number redundant and
inconsequential.

Ilano vs. Hon. Espanol

GR No. 161756, 16 December 2005

A reading of the promissory notes show (sic) that the liability of the signatories
thereto are solidary in view of the phrase jointly and severally. On the promissory
note appears (sic) the signatures of Eduardo B. Evangelista, Epifania C. Evangelista
and another signature of Eduardo B. Evangelista below the words Embassy Farms,
Inc. It is crystal clear then that the plaintiffs-spouses signed the promissory note not
only as officers of Embassy Farms, Inc. but in their personal capacity as well(.)
Plaintiffs(,) by affixing their signatures thereon in a dual capacity have bound
themselves as solidary debtor(s) with Embassy Farms, Inc. to pay defendant
Mercator Finance Corporation the amount of indebtedness.

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