Salas vs CA G.R. No. 76788 January 22, 22, 1990 Petitioner : JUANITA SALAS Responents : HON. COURT OF APPEALS and FIRST FINANCE & LEASING CORPORATION !opi": Collection Suit; Reui!ite! o" HI#C #a"ts: Petitione$ Sala! %ou't a (oto$ )e'icle "$o( t'e *iolao +oto$ Sale! Co$,o$ation -*+SC e)idenced %/ a ,$o(i!!o$/ note. *+SC !u%!euentl/ endo$!ed to P$i)ate Re!,ondent Filin)e!t Finance & Lea!in Co$,o$ation 0'ic' 1nanced t'e ,u$c'a!e. Petitione$ de"aulted in 'e$ in!tall(ent! alleedl/ due Petitione$ to a di!c$e,anc/ in t'e enine and c'a!!i! nu(%e$! o" t'e )e'icle deli)e$ed to 'e$ and t'o!e indicated in t'e !ale! in)oice2 ce$ti1cate o" $ei!t$ation and deed o" c'attel (o$tae2 0'ic' "act !'e di!co)e$ed 0'en t'e )e'icle 1u$ed in an accident. T'i! "ailu$e "ailu$e to ,a/ ,$o(,ted ,$o(,ted ,$i)ate ,$i)ate $e!,ondent $e!,ondent to initiate a ca!e "o$ t'e collection o" a !u( o" (one/ aain!t ,etitione$ %e"o$e t'e Reional T$ial Cou$t o" Pa(,ana. T'e t$ial cou$t cou$t decided in "a)o$ "a)o$ o" t'e PR PR..
3ot' ,etitione$ and ,$i)ate $e!,ondent a,,ealed t'e a"o$e!aid deci!ion to t'e Cou$t o" A,,eal!. I(,utin "$aud2 %ad "ait' and (i!$e,$e!entation aain!t *+S "o$ 'a)in deli)e$ed a di4e$ent )e'icle to ,etitione$2 t'e latte$ ,$a/ed "o$ a $e)e$!al o" t'e t$ial cou$t5! deci!ion !o t'at !'e (a/ %e a%!ol)ed "$o( t'e o%liation unde$ t'e cont$act. T'e Cou$t o" A,,eal! $ende$ed it! a!!ailed deci!ion. Petitione$5! (otion "o$ $econ!ide$ation 0a! denied; 'ence2 t'e ,$e!ent $ecou$!e.
$ssues: 0'et'e$ t'e ,$o(i!!o$/ note in ue!tion i! a neotia%le in!t$u(ent 0'ic' 0ill %a$ co(,letel/ all t'e a)aila%le de"en!e! o" t'e ,etitione$ aain!t ,$i)ate $e!,ondent.
%el: A ca$e"ul !tud/ o" t'e ue!tioned ,$o(i!!o$/ note !'o0! t'at it i! a neotia%le in!t$u(ent2 'a)in co(,lied 0it' t'e $eui!ite! unde$ t'e la0 a! "ollo0!: 6a7 it i! in 0$itin and !ined %/ t'e (a8e$ Juanita Sala!; 6%7 it contain! an unconditional ,$o(i!e to ,a/ t'e a(ount o" P92<.=>; 6c7 it i! ,a/a%le at a 1?ed o$ dete$(ina%le "utu$e ti(e 0'ic' i! @P2B.9 (ont'l/ "o$ < (ont'! due and ,a/a%le on t'e = !t da/ o" eac' (ont' !ta$tin +a$c' =2 > t'$u and inclu!i)e o" Fe%. =2 <;@ 6d7 it i! ,a/a%le to *iolao +oto$ Sale! Co$,o$ation2 or order and
a! !uc'2 6e7 t'e d$a0ee i! na(ed o$ indicated 0it' ce$taint/. In t'e ca!e at %a$2 'o0e)e$2 t'e !ituation i! di4e$ent. Indu%ita%l/2 t'e %a!i! o" ,$i)ate $e!,ondent5! clai( aain!t ,etitione$ i! a ,$o(i!!o$/ note 0'ic' %ea$! all t'e ea$(a$8! o" neotia%ilit/. It 0a! neotiated %/ indo$!e(ent in 0$itin on t'e in!t$u(ent it!el" ,a/a%le to t'e O$de$ o" Filin)e!t Finance and Lea!in Co$,o$ation and it i! an indo$!e(ent o" t'e enti$e in!t$u(ent. Unde$ t'e ci$cu(!tance!2 t'e$e a,,ea$! to %e no ue!tion t'at Filin)e!t i! a 'olde$ in due cou$!e2 'a)in ta8en t'e in!t$u(ent unde$ t'e "ollo0in condition!: 6a7 it i! co(,lete and $eula$ u,on it! "ace; 6%7 it %eca(e t'e 'olde$ t'e$eo" %e"o$e it 0a! o)e$due2 and 0it'out notice t'at it 'ad ,$e)iou!l/ %een di!'ono$ed; 6c7 it too8 t'e !a(e in ood "ait' and "o$ )alue; and 6d7 0'en it 0a! neotiated to Filin)e!t2 t'e latte$ 'ad no notice o" an/ in1$(it/ in t'e in!t$u(ent o$ de"ect in t'e title o" *+S Co$,o$ation. Acco$dinl/2 Re!,ondent Co$,o$ation 'old! t'e in!t$u(ent "$ee "$o( an/ de"ect o" title o" ,$io$ ,a$tie!2 and "$ee "$o( de"en!e! a)aila%le to ,$io$ ,a$tie! a(on t'e(!el)e!2 and (a/ en"o$ce ,a/(ent o" t'e in!t$u(ent "o$ t'e "ull a(ount t'e$eo". T'i! %ein !o2 ,etitione$ cannot !et u, aain!t $e!,ondent t'e de"en!e o" nullit/ o" t'e cont$act o" !ale %et0een 'e$ and *+S.
&o"trines :