GR 34686; (February, 1932) (3) (Digest)
G.R. No. 34686 , February 24, 1932
PHILIPPINE TRUST CO. vs. ANTIGUA BOTICA RAMIREZ, ET AL.
FACTS
The Philippine Trust Company (appellant) filed three consolidated cases to collect various debts from the defendants, including the corporation Antigua Botica Ramirez and its individual stockholders/guarantors (appellees). The debts consisted of: (1) an overdraft balance; (2) a promissory note; and (3) another promissory note partially secured by a mortgage. The trial court dismissed all complaints, ordered the mortgage cancelled, discharged the receiver of the corporation’s properties, and ordered those properties turned over to the plaintiff. The plaintiff appealed, assigning multiple errors.
ISSUE
The main issues, distilled from the assignments of error, involve the admissibility of certain evidence and the correctness of the trial court’s factual findings, particularly regarding: (1) whether a surety could testify about lack of consideration for his signature; (2) whether extensions for payment of the notes were granted; and (3) whether shares of stock were assigned to the plaintiff in payment of the obligations.
RULING
The Supreme Court reversed the trial court’s judgment.
1. On the first error, the Court held it was immaterial for the creditor whether a surety signed for consideration or not; the surety’s obligation remains.
2. On the second error, the Court found the testimony regarding extensions for payment was hearsay and uncorroborated, and direct evidence showed no extensions were granted. Mere delay in collection is not a defense for a surety.
3. On the third error, the Court ruled the testimony about an assignment of shares in payment was inadmissible as it attempted to vary the terms of the written promissory notes by parol evidence.
4. The Court also found errors in the admission of certain documentary evidence (Exhibits CC, DD, EE) and in the trial court’s overall assessment of the evidence.
Consequently, the Supreme Court rendered judgment in favor of the Philippine Trust Company in all three cases, ordering the defendants to pay the respective amounts due with interest and attorney’s fees. The liability of the mortgagor, Manuela Reyes y Almeida, was limited to the amount secured by her mortgage.
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