G.R. No. 171428 ; November 11, 2013
ALEJANDRO V. TANKEH, Petitioner, vs. DEVELOPMENT BANK OF THE PHILIPPINES, STERLING SHIPPING LINES, INC., RUPERTO V. TANKEH, VICENTE ARENAS, and ASSET PRIVATIZATION TRUST, Respondents.

FACTS

Petitioner Alejandro V. Tankeh was persuaded by his brother, respondent Ruperto V. Tankeh, to become a director of Sterling Shipping Lines, Inc. (Sterling). To secure a $3.5 million loan from respondent Development Bank of the Philippines (DBP) for the acquisition of the M/V Sterling Ace, DBP required, among other conditions, that Alejandro, Ruperto, Vicente Arenas, and Jose Marie Vargas bind themselves jointly and severally for the loan. Alejandro signed the Assignment of Shares of Stock and, later, the promissory note. In 1983, Alejandro severed ties with Sterling and demanded his release from all loan liabilities. The vessel was later sold by DBP in 1987 for $350,000, which Alejandro claimed was grossly inadequate. He filed complaints seeking to nullify the promissory note, alleging he was induced to sign through deceit and fraud by his brother and other respondents.

ISSUE

The primary issue is whether petitioner Alejandro V. Tankeh is liable under the promissory note he signed, and whether his defenses of fraud, deceit, and failure of consideration are valid to extinguish his obligation.

RULING

The Supreme Court denied the petition and affirmed Alejandro’s liability. The legal logic is anchored on the principles of contracts and negotiable instruments. Alejandro voluntarily signed the promissory note, making him a solidary co-debtor. His defense of fraud or deceit in the inducement is a personal defense that cannot be set up against DBP, which is a holder in due course of the note. The Court found DBP to be such a holder, having taken the instrument for value, in good faith, and without notice of any defect at the time it was negotiated. The alleged inadequacy of the vessel’s sale price does not constitute a failure of consideration that would nullify the promissory note itself; it is a separate matter from the loan obligation. His act of signing the note created a valid and binding obligation distinct from any intra-familial representations. Consequently, his severance from the corporation did not automatically release him from his solidary liability to the creditor bank. The claims for moral damages and attorney’s fees were also denied for lack of merit.