G.R. No. L-2355

FACTS:
Plaintiff E.B. Merchant filed an action against defendant International Banking Corporation upon a promissory note, the payment of which was guaranteed in writing by the defendant. The guaranty was signed “For the International Banking Corporation, R. W. Brown.” A copy of the note with the guaranty was attached to the complaint. In its unsworn answer, the defendant generally denied the allegations and specifically alleged that it could not, under its charter, enter into such a contract of guaranty, and that R.W. Brown was not authorized to execute the guaranty on its behalf. At trial, the plaintiff presented the promissory note with the guaranty and the notarial protest as evidence, then rested. The defendant presented no evidence. The trial court rendered judgment in favor of the plaintiff based on Section 103 of the Code of Civil Procedure.

ISSUE:
Whether the defendant’s failure to deny under oath the genuineness and due execution of the written guaranty attached to the complaint constitutes an admission of: (1) the signature of R.W. Brown; (2) his authority to execute the guaranty on behalf of the defendant; and (3) the defendant’s corporate power to enter into such a contract.

RULING:
Yes. Under Section 103 of the Code of Civil Procedure, when an action is based on a written instrument and a copy is attached to the complaint, the genuineness and due execution of the instrument are deemed admitted unless specifically denied under oath. The defendant’s answer, which contained the specific defenses of lack of corporate power and lack of agent authority, was not sworn to. Consequently, the failure to file a sworn specific denial operated as an admission not only of the genuineness of the signature of R.W. Brown but also of his authority to bind the corporation and of the corporation’s power to enter into the contract of guaranty. The judgment of the trial court in favor of the plaintiff is affirmed.