Inciong, Jr. v. Court of Appeals
REITERATIONFacts
The Antecedents: Petitioner Baldomero Inciong, Jr. signed a promissory note on February 3, 1983, along with Rene C. Naybe and Gregorio D. Pantanosas, holding themselves jointly and severally liable to Philippine Bank of Communications (PBCom) for P50,000.00, due on May 5, 1983. The promisors failed to pay the obligation upon maturity. Procedural History: PBCom sent demand letters to the obligors. On January 24, 1986, PBCom filed a complaint for collection. The case was initially dismissed for failure to prosecute but was later reinstated. The case was dismissed against Pantanosas upon PBCom's motion. Summons was served only on petitioner Inciong, as Naybe had gone to Saudi Arabia. The Petition: Petitioner alleged that he was induced to act as a co-maker for a loan of P5,000.00 through trickery, fraud, and misrepresentation by Rudy Campos, who claimed to be a partner of the bank's branch manager. Petitioner claimed he signed blank promissory notes and indicated his limited liability of P5,000.00 on one copy. The Regional Trial Court (RTC) ruled against petitioner, finding his uncorroborated testimony insufficient to overcome the presumed regularity of the transaction and the clear typewritten amount of P50,000.00 on the note. The Court of Appeals affirmed the RTC decision. Petitioner filed a petition for review on certiorari.
Issue(s)
Whether petitioner's consent to the promissory note was vitiated by fraud. Whether the dismissal of the case against co-makers Naybe and Pantanosas released petitioner from his solidary obligation. Whether parol evidence can be admitted to vary the terms of the written promissory note.
Ruling
The petition is denied, and the decision of the Court of Appeals is affirmed. Petitioner Baldomero Inciong, Jr. is adjudged solidarily liable to pay Philippine Bank of Communications P50,000.00 with interest, liquidated damages, attorney's fees, and costs.
Ratio Decidendi
On the vitiation of consent by fraud: The Court held that petitioner's claim of fraud and limited liability was not sufficiently established. His uncorroborated testimony could not prevail over the presumed regularity of the transaction, especially since the promissory note clearly showed the typewritten amount of P50,000.00 directly below his signature. The Court found it "odd" that he would indicate a limited liability of P5,000.00 only on one copy and not the original. Furthermore, even if such an agreement for P5,000.00 existed between petitioner and Naybe, it would have been merely collateral and not binding upon the creditor-bank. Fraud must be established by clear and convincing evidence, and petitioner's attempt to prove it was evidenced only by his own self-serving testimony. On the release from solidary obligation: The Court clarified that petitioner signed as a solidary co-maker, not a guarantor. The promissory note expressly stated that the signatories were "JOINTLY and SEVERALLY" liable. A solidary obligation means each debtor is liable for the entire obligation. The dismissal of the case against co-maker Pantanosas, even upon the motion of the private respondent, did not discharge petitioner from his liability. The choice of whom to enforce collection against is left to the solidary creditor. Regarding Naybe, the court never acquired jurisdiction over him. Therefore, petitioner's liability remains, and he may have recourse against his co-makers as provided by law. On the admissibility of parol evidence: The Court reiterated that the parol evidence rule applies when the terms of an agreement have been reduced to writing. It prevents the admission of evidence other than the contents of the written agreement to prove its terms. The rule does not require the written agreement to be a public document. While fraud can be an exception to the parol evidence rule, it must be proven by clear and convincing evidence. Petitioner's allegation of fraud, based on his uncorroborated testimony, did not meet this standard. The written promissory note, being a commercial instrument, is generally not subject to variation or contradiction by parol evidence.
Main Doctrine
A solidary or joint and several obligation is one in which each debtor is liable for the entire obligation, and each creditor is entitled to demand the whole obligation. The choice is left to the solidary creditor to determine against whom he will enforce collection. The dismissal of a case against a co-maker does not necessarily discharge another solidary co-maker from liability.