Inter-Asia Investments Industries vs.

Court of Appeals
[GR 125778, 10 June 2003]

Facts: On 1 September 1978, Inter-Asia Industries, Inc. (Inter-Asia), by a Stock Purchase Agreement (the Agreement),
sold to Asia Industries, Inc. (Asia Industries) for and in consideration of the sum of P19,500,000.00 all its right, title and
wers, lays down all corporate business policies and is responsible for the efficiency of management, as provided in
Section 23 of the Corporation Code of the Philippines. Under this provision, the power and responsibility to decide
whether the corporation should enter into a contract that will bind the corporation is lodged in the board, subject to the
articles of incorporation, bylaws, or relevant provisions of law. However, just as a natural person may authorize another to
do certain acts for and on his behalf, the board of directors may validly delegate some of its functions and powers to
officers, committees or agents. The authority of such individuals to bind the corporation is generally derived from law,
corporate bylaws or authorization from the board, either expressly or impliedly by habit, custom or acquiescence in the
general course of business, viz: "A corporate officer or agent may represent and bind the corporation in transactions with
Republic Planters Bank issued 9 promissory notes signed by Shozo Yamaguchi (President) and Fermin Canlas
(Treasurer) of Worldwide Garment Manufacturing Inc. Yamaguchi and Canlas were authorized by the corporation to apply
for credit facilities with the bank in form of export advances and letters of credit or trust receipts accommodations. Three
years after, the bank filed an action to recover the sums of money covered by the promissory notes. Worldwide Garment
Manufacturing changed its name to Pinch Manufacturing Corp. Canlas alleged he was not liable personally for the
corporate acts that he performed, and that the notes were still blank when he signed them.

Issue: Whether or not the corporate treasurer is liable for the amounts in the promissory notes.

Held: Canlas is a co-maker of the promissory notes, under the law, and cannot escape liability arising therefrom.
Inasmuch as the instrument contained the words “I promise to pay” and is signed by two or more persons, said persons
are deemed to be jointly and severally liable thereon. As the promissory notes are stereotype ones issued by the bank in
printed form with blank spaces filled up as per agreed terms of the loan, following customary procedures, leaving the
debtors to do nothing but read the terms and conditions therein and to sign as makers or co-makers. Section 14 of the
Negotiable Instruments Law, therefore, does not apply. Canlas is solidarily liable with the corporation for the amount of the
9 promissory notes.