CASE DIGEST: Philippine National Bank v. Concepcion Mining

 

PHILIPPINE NATIONAL BANK, plaintiff-appellee, vs. CONCEPCION MINING COMPANY,INC., ET AL., defendants-appellants

G.R. No. L-16968               |              July 31, 1962

 

FACTS:

The present action was instituted by PNB to recover from the Conceptio Mining et al. the promissory note which reads as follows:

"NINETY DAYS after date, for value received, I promise to pay to the order of the Philippine National Bank x x x.

"In case it is necessary to collect this note by or through an attorney-at-law, the makers and indorsers shall pay ten percent (10%) of the amount due on the note as attorney's fees, which in no case shall be less than P100.00 exclusive of all costs and fees allowed by law as stipulated in the contract of real estate mortgage. Demand and Dishonor Waived. Holder may accept partial payment reserving his right of recourse against each and all indorsers.

(Purpose—mining industry)

CONCEPCION MINING COMPANY, INC.,

By;

(Sgd.) VICENTE LEGARDA

President

(Sgd.) VICENTE LEGARDA

(Sgd.) JOSE S. SARTE

 

"Please issue check to—

Mr. Jose S. Sarte"

 

Upon the filing of the complaint the defendants presented their answer in which they allege that the co-maker of the promissory note Don Vicente L. Legarda, died on February 24, 1946 and his estate is in the process of judicial determination. On the basis of this allegation it is prayed, as a special defense, that the estate of said, deceased Vicente L. Legarda be included as party-defendant. The court in its decision ruled that the inclusion of said defendant is unnecessary and immaterial, in accordance with the provisions of Article 1216 of the new Civil Code and section 17 (g) of the Negotiable Instruments Law.

 

ISSUE:

Whether or not Legarda should be held solidarily liable

 

RULING:

Section 17 (g) of the Negotiable Instruments Law provides as follows:

"SEC. 17. Construction where instrument is ambiguous.—Where the language of the instrument is ambiguous or there are omissions therein, the following rules of construction apply:

Xxx

(g) Where an instrument containing the word 'I promise to pay' is signed by two or more persons, they are deemed to be jointly and severally liable thereon.”

And Article 1216 of the Civil Code of the Philippines also provides as follows:

"ART. 1216. The creditor may proceed against any one of the solidary debtors or some of them simultaneously. The demand made against one of them shall not be an obstacle to those which may subsequently be directed against the others so long as the debt has not been fully collected."

In view of the above quoted provisions, and as the promissory note was executed jointly and severally by the same parties, namely, Concepcion Mining Company, Inc, and Vicente L. Legarda and Jose S. Sarte, the payee of the promissory note had the right to hold any one or any two of the signers of the promissory note responsible for the payment of the amount of the note.