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ASTRO ELECTRONICS CORP. v. PHILIPPINE EXPORT

FACTS:

Astro Electronics Corp. (Astro) was granted several loans by Philippine Trust Company (Philtrust) amounting to P3,000,000. The loans were secured by three promissory notes signed by Peter Roxas, who was the President of Astro. Philguarantee guaranteed the payment of 70% of Astro's loan. Eventually, Philguarantee paid the guaranteed loan to Philtrust due to Astro's failure to pay its obligations. Philguarantee filed a complaint for sum of money against Astro and Roxas.

Roxas disclaimed any liability on the instruments, alleging that he signed them in blank and the phrases "in his personal capacity" and "in his official capacity" were fraudulently inserted without his knowledge.

The RTC rendered a decision in favor of Philguarantee, ordering Astro and Roxas to pay the amount owed. The Court of Appeals affirmed the decision.

ISSUES:

  1. The main issue is whether or not Roxas should be jointly and severally liable with Astro for the amount awarded by the RTC.

RULING:

  1. The Supreme Court ruled in the affirmative. Roxas is liable for the amount owed. Roxas' claim that the phrases "in his personal capacity" and "in his official capacity" were inserted without his knowledge was disregarded. He signed the promissory notes twice, indicating his intention to be liable in two different capacities. The signatures affixed by Roxas on the promissory notes covered portions of the typewritten words "personal capacity", showing that the words were already existing at the time Roxas signed the notes.

  2. The three promissory notes contain provisions that make the makers solidarily liable. Roxas cannot avoid liability by claiming ignorance of the provisions. He signed the notes on different dates and executed a "continuing Surety ship Agreement" wherein he guaranteed the repayment of the loan. Roxas knew the nature of the transactions and documents involved.

  3. Furthermore, Philguarantee has the right to proceed against Roxas as it is subrogated to the rights of Philtrust, having paid 70% of the loan obligation. Subrogation is the transfer of the creditor's rights to a third person, and Roxas' acquiescence is not necessary for subrogation to take place.

  4. Therefore, the decision of the Court of Appeals affirming the RTC's ruling is affirmed.