PHILIPPINE TRUST COMPANY, PLAINTIFF AND APPELLEE, VS. F. M. YAP TICO & CO., LTD., ET AL., DEFENDANTS. F. M. YAP TICO & CO., LTD., APPELLANT.

With respect to the defendant F. M. Yap Tico & Co., Ltd., which is the
only appellant, these two cases were heard together.

In November and December 1923, the following promissory notes were
executed:

“Int. Rev. Stamps affixed P5.00

“P50,000.00

“Three months after date, for value received, we promise to pay to the order
of Mr. Enrique Echaus, Manila, P. I., the sum of fifty thousand pesos,
Philippine currency.

“Iloilo, Iloilo, November 13, 1923.

“THE VISAYAN GENERAL SUPPLY CO., INC.

“By: (Sgd.) ENRIQUE ECHAUS
“President

“F. M. YAP TICO & CO., LTD.

“By: (Sgd.) YAP SENG
“Pres. & Gen. Manager“

“P25,000.00/100

“Three months after date, by virtue of these presents, we shall pay
jointly and severally in Manila to the order of The Visayan General
Supply Co., Inc., the sum of twenty-five thousand (P25,000.00/100) pesos
only, Philippine currency, value received from same in cash. This note shall
bear interest at 9 per cent per annum, and if not satisfied upon
maturity, …… per cent on the principal, in addition, to cover judicial costs
and expenses, in case of litigation.

“Manila, Dec. 5, 1923.

“F. M. YAP TICO & CO., LTD.

“By: (Sgd.) YAP SENG
“Pres. & Gen. Manager“

“P2.50 worth of doc. stamp affixed.

 This note matures on …………………….

“No. ………… P25,000.00/100

“Three months after date, by virtue of these presents, we shall pay jointly
and severally in Manila to the order of The Visayan General Supply Co., Inc.,
the sum of twentyfive thousand (P25,000.00/100) pesos only, Philippine currency,
value received from same in cash. This note shall bear interest at 9 per cent
per annum, and if not satisfied upon maturity, per cent on the principal, in
addition, to cover judicial costs and expenses, in case of litigation.

“Manila, Dec. 6, 1923.

“F. M. YAP TICO & CO., LTD.

“By: (Sgd.) YAP SENG
“Pres. & Gen. Manager“

“P2.50 worth of doc. stamp affixed.

 This note matures on …………………..

Enrique Echaus delivered the first of these three promissory notes to the
plaintiff by means of the following endorsement:

“Pay to the order of the Philippine Trust Company. Manila, Jan. 4th, 1924.

“ENRIQUE ECHAUS”

The second note was also delivered by the following endorsement:

“THE VISAYAN GENERAL SUPPLY CO., INC.

“ENRIQUE ECHAUS
“President“

Enrique Echaus, in turn, endorsed it in blank to the plaintiff, with his
signature, “ENRIQUE ECHAUS.”

The third note was also delivered to the plaintiff with this endorsement:

“THE VISAYAN GENERAL SUPPLY CO., INC.

“ENRIQUE ECHAUS
“President“

Of these three promissory notes, the first two are the subject matter of the
two proceedings leading up to the present decision (civil case No. 6721 of the
lower court), and the last note is the subject matter of the other proceeding
(civil case No. 6720 of the same court).

The plaintiff prays for judgment in its favor in both cases for the amount of
these obligations, plus interest thereon.

The defendants the Visayan General Supply Co., Inc., and Enrique Echaus were
declared in default and judgments were rendered against them.

The defendant F. M. Yap Tico & Co., Ltd., filed an answer and set up
special defenses in both causes.

After joint trial of both proceedings the court rendered judgment against the
last named defendant in civil case No. 6720 as follows:

“In consideration of the premises, judgment is hereby rendered in said case
No. 6720, in favor of the Philippine Trust Co., and against the defendant F. M.
Yap Tico & Co. Ltd., for the sum of P25,000, with interest thereon at 9 per
cent per annum from March 6, 1924 until fully paid, and legal interest at 6 per
cent per annum on the interest accumulated from the date of the filing of the
complaint until the date of the judgment, plus the costs of the
action.”

And in civil case No. 6721, as follows:

“In view of these facts, judgment is hereby rendered against F. M. Yap Tico
& Co., Ltd., jointly with the Visayan General Supply Inc., for the sum of P50,000 with interest thereon at 9 per cent per annum from February 11, 1924
until fully paid, and with legal interest at 6 per cent per annum on the
interest accumulated from the date of the filing of the complaint until the date
of the judgment. And judgment is hereby rendered against the defendant F. M. Yap
Tico & Co., Ltd., for the sum of P25,000, with interest thereon at 9 per
cent per annum from March 5, 1924, plus legal interest at 6 per cent per annum
on the interest accumulated from the date of the filing of the complaint until
the date of the judgment, plus the costs of this action.”

F. M. Yap Tico & Co., Ltd., appeals from these judgments, alleging that
its president and general manager Yap Seng, signed the promissory notes as an
accommodation party without having received any valuable consideration
whatsoever, and that neither he nor his corporation is empowered to sign
promissory notes as accommodation parties. These points were not proven. Yap
Seng’s deposition wherewith efforts were made to prove them, was rightly
rejected from the evidence by the trial court. Yap Seng is now estopped from
denying the validity of the corporate transaction which he executed in the name
of the corporation, thereby leading a third person to believe that both he and
his corporation had authority to execute it. (14 [A] C. J., 333-334, 372; see
Coleman vs. Hotel de France Co., 29 Phil., 323.)

The appellant also alleges that at the time of the endorsements the plaintiff
knew that Yap Seng had signed the promissory notes only as an accommodation
party. Neither has this point been sufficiently established. All the
circumstance of the case, even to the sum total of the promissory notes
executed in favor of Echaus, are strongly against the appellant’s contention. In
the face of the evidence of record, such a contention cannot be considered
proven, even taking into account Enrique Echaus’s testimony. We find no merit in
the first assignment of error.

It appears from the record that the plaintiff received these three promissory
notes in the ordinary coarse of business, paid their value after discounting the
9 per cent interest per annum for three months, demanded payment of the
defendants, and that nothing was paid on account, despite the fact that the
periods fixed had expired. These are established facts. The inconsistencies
attributed to O’Malley’s testimony detract no force or efficacy therefrom. The
second assignment of error is not proven.

As the appellant has.not proven that the promissory notes were signed as a
mere accommodation paper, it was incumbent upon said appellant, in order to
exhaust its defense, to show that it was not empowered to execute such
promissory notes, and this has not been established. The third assignment of
error is untenable.

The judgment appealed from is hereby affirmed, with costs against the
appellant. So ordered.

Johnson, Street, Malcolm, Ostrand, and Villa-Real, JJ.,
concur.