Philippine National Bank v. Go Chong Bing
REITERATIONFacts
The Antecedents: On February 4, 1921, Go Chong Bing executed a promissory note for P20,500 in favor of the widow of Tan Toco, who endorsed it to the Philippine National Bank (PNB). The note matured on May 19, 1921. On January 31, 1922, P7,000 was paid on account. On February 5, 1921, Go Chong Bing executed another promissory note for P21,500 in favor of the same widow, which was also endorsed to PNB. This note matured on June 5, 1921. On January 31, 1922, P7,000 was paid on account. Procedural History: PNB filed a suit on May 26, 1926, to recover the unpaid balances of the notes plus interest. The lower court rendered judgment in favor of PNB, awarding legal interest because the notes did not specify an interest rate. The judgment awarded P13,500 for the first note and P14,500 for the second, plus legal interest from May 27, 1926. The plaintiff PNB acquiesced, but the defendants appealed. The Petition: The defendants contended that it was not proven that the widow of Tan Toco endorsed the notes to PNB or made any payments on account.
Issue(s)
Whether the endorsement of the promissory notes by the attorney-in-fact of the widow of Tan Toco was sufficient. Whether the payments made on account were proven and properly credited.
Ruling
The Supreme Court affirmed the judgment of the lower court in toto, with costs against the appellants.
Ratio Decidendi
On the sufficiency of the endorsement by the attorney-in-fact: The Court held that the uncontradicted testimony of Ramon Mendoza established that Mariano de la Rama Tan Bungco was the attorney-in-fact of the widow of Tan Toco. This evidence, not weakened by any contrary proof, was deemed sufficient to show the validity of the endorsement made by the principal through her authorized representative. The objection that the evidence was immaterial was overruled, as it related to an essential point of the case. The Court emphasized that the attorney-in-fact acted within the scope of their authority in endorsing the notes on behalf of the widow. On the payments made on account: The Court found that the responsibility of the widow of Tan Toco to the plaintiff Bank with respect to the two promissory notes had been proven. Consequently, it was to the widow's benefit to acknowledge that she made the payments on account of such obligations. The evidence further established that these payments were indeed made and, in view of the circumstances, could only be credited to the debtor, Go Chong Bing, as payments towards his outstanding obligations. The Court reasoned that since the widow's liability was established, any payments made by her must be applied to reduce the debt owed to the bank.
Main Doctrine
The endorsement of a promissory note by an attorney-in-fact is sufficient to bind the principal, and payments made on account of an obligation can only be credited to the debtor.