Quirino Gonzales Logging vs. CA

MEMORY AID: Petitioners executed a promissory note in favour to respondent Bank in order to secure certain advances from the Bank in connection with its exportation of logs. Petitioners defaulted in the payment of the notes.  They signed the promissory notes notes in Blank Incomplete NI, when delivered, the person in possession of such has the prima facie authority to fill in the blanks, to complete the NI. It has also amount, and the the auth author orit ity y to fill fill up for for any amount, and in acco accord rdan ance ce with with the the authority given and within a reasonable time.

TITLE: Quirino Gonzales Logging vs. CA FACTS: Spouse Spouses s Quiri Quirino no and Eufemi Eufemia a Gonzal Gonzales es of the Quirin Quirino o Gonzal Gonzales es Logging Logging Concessionaire (QGLC) executed promissory notes in favour to respondent Repu Republ blic ic Plan Plante ters rs Bank Bank to secu secure re cert certai ain n adva advanc nces es from from the the Bank Bank in connection with its exportation of logs. The notes were payable 30 days after date and provided for the solidary liability of petitioners as well as attorney’s fees fees at ten ten perc percen entt of the the tota totall amou amount nt due due in the the even eventt of thei theirr nonnonpayment at maturity. Later on, petitioner QGLC has long been defaulted in the payment of their obligations with the promissory notes they executed. The Bank then filed a complaint against the petitioner for “sum of money.” Howe Howeve ver, r, peti petiti tion oner ers s seek seek to evad evade e liabi liabili lity ty unde underr the the Bank Bank’s ’s caus causes es of  promissory ry notes notes in action action by claim claiming ing that they Gonzal Gonzales es sig signed ned the promisso blank and that they had not received the value of said notes. ISSUE: W/N the petitioners would be held liable for the payment of the promissory notes they executed despite of the fact that they singed the notes in blank. RULING: Section n 14 of the Negoti  Yes, because as Sectio Negotiabl able e Instrum Instrument ents s Law allows allows the prima facie authority of the person in possession of negotiable instruments, such as the notes herein, to fill in the blanks , to complete an incomplete instrument.

Moreover, a signature on a blank paper delivered in order that it may be converted into a negotiable instrument operates as a prima facie authority to fill it up as such for any amount. Also petitioner admitted to the genuineness and due execution of the promissory notes. The promissory notes, however, appear to be negotiable as they meet the requirements of Section 1of the Negotiable Instruments Law. Such being the case, the notes are  prima facie deemed to have been issued for consideration. It bears noting that no sufficient evidence was adduced by petitioners to show otherwise. In order, however, that any such instrument when completed may be enforced against a person who became a party thereto prior to its completion, it must be filled up strictly in accordance with the authority given and within a reasonable time. But if any such instrument, after completion, is negotiated to a holder in due course, it is valid and effectual for all purposes in his hands, and he may enforce it as if it had been filled up strictly in accordance with the authority given and within a reasonable time.