Salas vs. CA and Filinvest Finance Leasing

G.R. No. 76788. January 22, 1990.


Petitioner bought a motor vehicle from the Violago Motor Sales Corporation (VMS) evidenced by a promissory note (P58,132).

The note was subsequently endorsed to Filinvest Finance & Leasing Corporation which financed the purchase.

Petitioner defaulted in her installments because VMS delivered a different engine and chassis numbers compared to which indicated in the Invoice, COR and mortgage.

Filinvest filed a civil suit for a sum of money against petitioner. The trial court ordered petitioner to pay the defendant. They both appealed the decision to the Court of Appeals.

In her appeal, Petitioner Imputed fraud bad faith and misrepresentation against  VMS.

The Court of Appeals modified the decision and ordered the petitioner to pay the defendant sum of P54,908.30 at 14% per annum. Her motion for reconsideration was denied.


whether the promissory note in question is a negotiable instrument which will bar completely all the available defenses of the petitioner against private respondent.


Yes.  The questioned promissory note is a negotiable instrument because it complied with all the requisites provided for by law:

[a] that it is in writing and signed by the maker Juanita Salas;

[b] that it contains an unconditional promise to pay the amount of P58,138.20;

[c] that it is payable at a fixed or determinable future time which is “P1,614.95 monthly for 36 months due and payable on the 21 st day of each month starting March 21, 1980 thru and inclusive of Feb. 21, 1983;”

[d] that it is payable to Violago Motor Sales Corporation, or order and as such,

[e] that the drawee is named or indicated with certainty.

The note was negotiated by indorsement in writing on the instrument itself payable to the Order of Filinvest Finance and Leasing Corporation. It is an indorsement of the entire instrument.

As a holder in due course, Filinvest holds the instrument free from any defect of title of prior parties, and free from defenses available to prior parties among themselves, and may enforce payment of the instrument for the full amount thereof. This being so, petitioner cannot set up against respondent the defense of nullity of the contract of sale between her and VMS.