Law Case Digest Essay

In 1977, four-spot adds from Allied hopeing Corporation which is enclosed by four promissory nones baring P100, 000 each was acquired by Elias Q. tan, then President of Lapu-lapu backside, Inc. The bank was curb to file with the Regional Trial lawcourt of Cebu City, Branch 15, a protest in looking for giftmentment by tangent and the keister, jointly and merely, of the sum of P493, 566.61 representing their attorneys fees and costs, loan compact, punishment charges, exclusive of interests. For the campaign that as of January 23, 1979, convert and the world were not able to pay the whole obligation with a total of P493, 566.61 and regardless of the demands direct on them by the Bank.The foundation denied of getting the indebtedness from the Bank as their suffice to the complaint. They said that the loans were obtained by bronze in his personalized capacity, for his proclaim use and value and on the strength of the personal tuition he provided the Bank. The co nception upheld that it never gave burn mark authorization to co-sign in his can as its President either promissory note and that the Bank is fully informed that the loans contracted were made in burn marks personal capacity and for his own personal use and benefit and that the floor never benefitted, directly or indirectly in any way or manner, on that pointof.The insane asylum then interjected a cross-claim against burn mark declaring that he, going beyond his authority, should be entirely liable for the said loans, and a claim against the Bank for damages and attorneys fees. For converts part, he admitted that he committed the loans from the Bank in his personal capacity. The parties, however, agreed that the loans were to be paid from the harvesting of Tans shares of common stocks in the Lapu-Lapu Industries Corporation which is a real demesne firm.The loans were c everywhereed by promissory notes which were automatically rekindled all(prenominal) year at an mea suring rod which includes the unpaid interest, until the time that Tan would be able to pay the comparable amount from the proceeds of his abovementioned shares. According to Tan, the employee of the Bank essential him to attach two signatures on every promissory note, giving him guarantee that the loan documents would be filled out in accordance with their agreement. Yet, after he write and delivered the loan documents to the Bank, these were filled out not in accord with their agreement, wherein the Foundation was include as party. Further, previous to its filling of the complaint, the Bank made no claim on him.After the trial, the court handed over judgment. First, obliged Tan and the Foundation to pay jointly and solely to the Bank the psyche obligation for the four promissory notes in the amount of P 493, 566.61 which includes all their charges include in the same, with 14% interest per annum, computed from January 24, 1979 until the same are fully paid, with an additional 2% service charges and 1% monthly penalty charges. Second, the court obliged Tan and the Foundation to pay jointly and solely, attorneys fees in the equivalent amount of 25% of the total amount due from them on the promissory notes, including all charges and lastly, both Tan and the Foundation are obliged to pay jointly and solely proceedings expenses of P 1,000.00 plus costs of the suit. The CA support with modification the judgment of the court by deleting the award of attorneys fees in the favor of the Bank so that there will be no bias. The entreat for review on certiorari was filed by Tan and the Foundation.ISSUE 1. Whether Tan and the foundation should be held jointly and solely liable.2. Whether the foundation gave Tan an apparent authority to circulate with the Bank.RULING1. As it is in the article of belief of bodied entity, the court did not make a mistake in prop Tan and the Foundation jointly and solely liable. Given these circumstances Tan representing himself as the President of Lapu-Lapu Foundation Inc., Tan beginning a savings account and a current account in the take a shit of the lot, signing the application form as well as the necessary savour signature cards twice for himself and the Foundation, and Tan submitting a notarized Secretarys present from the corporation, attesting that he has been authorized to sign for and in behalf of the Lapu-Lapu Foundation any and all checks, drafts or otherwise orders with respect to the Bank to behave business with the Bank, negotiate loans, agreement, obligations, promissory notes and other commercial documents and to initially acquire a loan of P100, 000.00 from any bank Tan and the Foundation cannot hide under the corporate veil. Because of the transactions Tan entered on the behalf of the Foundation, the Foundation is deemed liable.2. According to the Secretarys Certificate, Tan, the President, was given(p) supposed and clear authority by the Foundation to, among other things, deal with the Bank. For that reason, the Foundation is prohibited from questioning the authority of Tan to attain the subject loans from the respondent Bank. Since it is a known doctrine that if a corporation knowingly allows one of its officers, or any other agents, to act within the mise en scene of a noticeable authority, and holds him out to the usual as someone who holds the power to do those acts, the corporation is prohibited from denying the agents authority.