GREAT ASIAN SALES CENTER CORPORATION and TAN CHONG LIN, petitioners, vs. THE COURT OF APPEALS and BANCASIA FINANCE AND INEST!ENT CORPORATION, respondents. Apri" #$, #%%# CARPIO, &. Di'est () E*'enio Le)nes Note: I Included all three issues in the case. But the most important one is the SECOND issue. Good luck. Sorry mahaba ung digest. Topi+ and Provisions -*a"ied Indorse/ent
Fa+ts − Great Asian is engaged in the business of buying and selling general merchandise, in particular household appliances. directors of Great Asian approved approved 2 resolutions resolutions authorizing authorizing its Treasurer reasurer and − The board of directors General Manager, Arsenio Lim Piat r. to !"# secure a loan from $ancasia not to e%ceed P" M and !2# to secure a discounting line &ith $ancasia not e%ceeding P2 M. − The "st board resolution also authorized Arsenio to sign all papers, documents or promissory notes necessary to secure the loan. The 2 nd board resolution also designated Arsenio as the authorized signatory to sign all instruments, documents and chec's necessary to secure the discounting line. − (n March ), "*+", Tan hong Lin signed a -urety Agreement in favor of $ancasia to guarantee, solidarily, solidarily, the debts of Great Asian to $ancasia. (n anuary 2*, "*+2, "*+2, Tan Tan hong Lin signed a omprehensive and ontinuing -urety Agreement in favor of $ancasia to guarantee, solidarily, the debts of Great Asian to $ancasia $ancasia.. Thus, Thus, Tan Tan hong Lin signed signed t&o surety surety agreemen agreements ts !-urety Agreements/ for brevity# in favor of $ancasia. through its Treasur Treasurer er and General Manager Arsenio, Arsenio, signed four !)# 0eeds of − Great Asian, through Assignment of 1eceivables !0eeds of Assignment/ for brevity#, assigning to $ancasia fteen !"3# postdated chec's. 4arious customers customers of Great Asian issued these postdated chec's chec's in payment for appliances and other merchandise. o Great Asian assigned a total of "5 chec's. (nly 2 &ere honoured. − Arsenio endorsed all the fteen dishonored chec's by signing his name at the bac' of the chec's. 6ight of the dishonored dishonored chec's bore bore the endorsement of Arsenio Arsenio belo& the stamped name of Great Asian -ales enter/, &hile the rest of the dishonored chec's 7ust bore the signature of Arsenio. − The dra&ee ban's dishonored the fteen chec's on maturity &hen deposited for collection by $ancasia, &ith any of the follo&ing as reason for the dishonor8 account closed/, payment stopped/, account account under garnishment/, garnishment/, and insu9ciency insu9ciency of funds/. The total amount of the fteen dishonored chec's is P",:)2,::3.::. − (n May 2", "*+2, Great Asian led &ith the then ourt of ;irst
(? A1-6?< A1-6?<( ( @A0 AT@(1 AT@(1(? G16A G16AT A-D =# >(? TA? TA? @(?G L pena"t) t3ereon, <(1 interest on t3e tota" o*tstandin' a/o*nt in ite/ per ann*/ 7ro/ t3e
"in' o7 t3e +o/p"aint *nti" t3e sa/e is 7*"") paid, <+1 attorne)?s 7ees e@*iva"ent to #$> o7 t3e tota" a/o*nt in ite/ per ann*/ on t3e o*tstandin' a/o*nt o7 t3e attorne)?s 7ees 7ro/ t3e na"it) o7 t3is *d'/ent *nti" t3e sa/e is 7*"") paid, and <+1 +osts o7 s*it. SO ORDERED. Ratio First Iss*e A*t3orit) o7 Arsenio to Si'n t3e Deeds o7 Assi'n/ent − Great Asian asserts that Arsenio signed the 0eeds of Assignment and indorsed the chec's in his personal capacity. The primordial Euestion that must be resolved is &hether Great Asian authorized Arsenio to sign the 0eeds of Assignment.
The e%plicit &ith recourse stipulation against Great Asian eIectively en"ar'es, by agreement of the parties, t3e "ia(i"it) o7 Great Asian (e)ond t3at o7 a /ere endorser o7 a ne'otia("e instr*/ent. Thus, &hether or not $ancasia gives notice of dishonor to Great Asian, the latter o remains liable to $ancasia because of the &ith recourse stipulation &hich is independent of the &arranties of an endorser under the ?egotiable
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Great sian!s recourse" − Great Asian, after paying $ancasia, is subrogated bac' as creditor of the receivables. Great Asian can then proceed against the dra&ers &ho issued the chec's. − 6ven if $ancasia failed to give timely notice of dishonor, still there &ould be no pre7udice &hatever to Great Asian. nder the ?egotiable
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Tan hong Lin maintains that these &arranties in the 0eeds of Assignment materially altered his obligations under the -urety Agreements, and therefore he is released from any liability to $ancasia. nder Article "2"3 of the ivil ode, &hat releases a solidary debtor is a novation, compensation, confusion or remission of the debt/ made by the creditor &ith any of the solidary debtors. These &arranties, ho&ever, are the usual &arranties made by one &ho discounts receivables &ith a nancing company or ban'. The -urety Agreements, &ritten on the letter head of $ancasia ;inance K
