G.R. No. L-75502 November 12, 1987
KALILID WOOD INDUSTRIES CORPORATION, ALFREDO SALONGA and JOAQUIN MIGUEL DE JESUS, petitioners, vs. HONORABLE INTERMEDIATE APPELLATE COURT and PHILIPPINE BANKING CORPORATION.

FACTS

Petitioner Kalilid Wood Industries Corporation (formerly P.B. De Jesus and Company, Inc.), through its officers Alfredo Salonga and Joaquin Miguel de Jesus, executed two promissory notes in favor of respondent Philippine Banking Corporation for sums totaling P900,000. The officers signed the notes twice: first, for and in behalf of the corporation, and second, in their personal capacities under the phrase “IN OUR PERSONAL CAPACIT[IES].” Upon maturity, the obligations remained unpaid. Respondent Bank filed a collection suit against the corporation and the officers. The trial court granted the Bank’s motion for summary judgment, holding Kalilid solidarily liable based on the notes and because Kalilid’s unverified answer amounted to an admission of the notes’ genuineness. The Intermediate Appellate Court affirmed the decision.

ISSUE

Whether the Court of Appeals erred in affirming the summary judgment holding petitioner Kalilid Wood Industries Corporation liable for the loan obligations, including the computed interest and charges.

RULING

The Supreme Court affirmed the liability of Kalilid for the principal and stipulated interest but remanded the case for reception of evidence on certain charges. The legal logic is twofold. First, on corporate liability, the promissory notes were signed by corporate officers for and on behalf of the corporation, P.B. De Jesus & Co., Inc. (Kalilid’s predecessor). A corporation is bound by the acts of its officers within the scope of their authority. The dual signing did not negate corporate liability; it merely created additional, personal liability for the officers. The corporation’s subsequent name change did not extinguish the obligation. Second, on the propriety of summary judgment, while the unverified answer did not specifically deny the genuineness of the annexed promissory notes under the rules, a summary judgment was proper only for the principal obligation and basic stipulated interest, as these were evidenced by the notes themselves and not genuinely disputed. However, the Bank’s computation of the total amount due (P1,780,253.08) included service charges, penalty charges, and interest on past due interest. The existence and reasonableness of these additional charges constituted a genuine factual issue requiring a full trial, as they were not explicitly stipulated in the promissory notes. Thus, the case was remanded to the trial court solely for the purpose of receiving evidence on these specific ancillary charges.