ASTRO ELECTRONICS CORP. and PETER ROXAS, vs.

PHILIPPINE EXPORT AND FOREIGN LOAN

GUARANTEE CORPORATION.
G.R. No. 136729; September 23, 2003.
AUSTRIA-MARTINEZ, J.

Doctrine: Subrogation is the transfer of all the rights of the creditor to a third person, who substitutes him in all his
rights. It may either be legal or conventional. Legal subrogation is that which takes place without agreement but by
operation of law because of certain acts. Instances of legal subrogation are those provided in Article 1302 of the Civil
Code. Conventional subrogation, on the other hand, is that which takes place by agreement of the parties.

Facts:

Astro was granted several loans by the Philippine Trust Company (Philtrust) amounting P3M w/ interest and secured
by 3 promissory notes: December 14, 1981: P600,000.00, December 14, 1981: P400,000.00, and August 27, 1981:
P2,000,000.00.

Petitioner Roxas signed twice, as President of Astro and in his personal capacity. Roxas also signed a Continuing
Surety ship Agreement in favor of Philtrust Bank, as President of Astro and as surety. Thereafter, Philguarantee, with
the consent of Astro, guaranteed in favor of Philtrust the payment of 70% of Astros loan, subject to the condition that
upon payment by Philguanrantee of said amount, it shall be proportionally subrogated to the rights of Philtrust against
Astro.

As a result of Astros failure to pay its loan obligations, despite demands, Philguarantee paid 70% of the guaranteed
loan to Philtrust. Subsequently, Philguarantee filed against Astro and Roxas a complaint for sum of money with the
RTC of Makati. Roxas disclaims any liability on the instruments, alleging, inter alia, that he merely signed the same in
blank and the phrases in his personal capacity and in his official capacity were fraudulently inserted without his
knowledge.

Isue: Whether or not Roxas should be jointly and severally liable with Astro.

Ruling: Astros loan with Philtrust Bank is secured by three promissory notes. These promissory notes are valid and
binding against Astro and Roxas. As it appears on the notes, Roxas signed twice: first, as president of Astro and
second, in his personal capacity. In signing his name aside from being the President of Asro, Roxas became a co-
maker of the promissory notes and cannot escape any liability arising from it. Under the Negotiable Instruments Law,
persons who write their names on the face of promissory notes are makers, promising that they will pay to the order
of the payee or any holder according to its tenor.

Thus, even without the phrase personal capacity, Roxas will still be primarily liable as a joint and several debtor
under the notes considering that his intention to be liable as such is manifested by the fact that he affixed his
signature on each of the promissory notes twice which necessarily would imply that he is undertaking the obligation
in two different capacities, official and personal.

Philguarantee has all the right to proceed against petitioner, it is subrogated to the rights of Philtrust to demand for
and collect payment from both Roxas and Astro since it already paid the value of 70% of roxas and Astro Electronics
Corp.s loan obligation. In compliance with its contract of Guarantee in favor of Philtrust.

Affirming the decision of the Regional Trial Court (Branch 147) of Makati, then Metro Manila, whereby petitioners
Peter Roxas and Astro Electronics Corp. (Astro for brevity) were ordered to pay respondent Philippine Export and
Foreign Loan Guarantee Corporation (Philguarantee), jointly and severally, the amount of P3,621,187.52 with
interests and costs.