FI RSTDI DI VI SI ON
G. R. No .1 6 3 1 1 6
J une2 9 , 2 0 1 5
t i t i o ne r , v . ALLI ED BANKI NG COR ORPORATI ON,Pe J ESUSS. YUJ UI CO ( DECEASED) , REPRESENTED BYBRENDON V. . s p o n d e n t YUJ UI CO, O,Re
BERSAMI N, J .
FACTS:Theb oar d ofdi r ec t or sofGene r alBank & Tr us tCom mp pany ( Genbank)appr ove da
r es ol ut i ongr ant i ngYLTC anOmni busCr edi tLi nei nt heam mo ountofP800, 000. 00t obemade a v a i l a b l ebyo v e r dr a f t s ,l o a nsa nda dv a nc e su po nc o ndi t i o nt ha tt hepr i nc i pa l so fYL TC wo ul d pe r s o na l l yb i ndt he ms ms e l v e si naCo nt i nui ngGua r a nt e et os e c u r epa y me me nto fo bl i g a t i o nsdr a wn wn o ns a i dc r e di te x t e nde db yGe nb ank .I no r d e rt os e c u r ep unc t ua lpa y me me nta tma t ur i t yo fYL TC' s o bl i g a t i o ns ,Gr e g or i a Y.Pa r e de s ,Cl a r e nc i oS .Yuj ui c oa nd J e s us S .Yuj ui c o ,pr i nc i pa l s t o c kho l de r so fYL TCa ss ur e t i e s , e x e c ut e daCont i nui ngGua r a nt e eb i ndi ngt he ms ms e l v e si nt he i r pe r s o na lc a pa c i t i e sa sr e qui r e db yGe nba nk .
Suc c es s i vere newal swasma madeunt i lt heCr edi tLi newasi ncr ea s edupt oP5. 2M M. .Meanwh whi l e, l oansc ont r ac t edbyYLTCevi dence dbypr om mi i s s or ynot esbec am me edueanddem ma andabl e.
Genbankwaspl ac edunderl i qui dat i onbyt heMo Monet ar yBoar dandAl l i edBanki ngCorpor at i on a c qui r e da l la s s e t sa nd l i a bi l i t i e sofGe nba nk.Pl a i nt i ffa ppe l l a nt ,a ss uc c e s s or i ni nt e r e s to f Genbank,s oughtt ocol l ec tt heamo mountcover edbyt hepr omi mi s s orynot es .YLTC f ai l edt opay c ons t r a i ni ngpl a i nt i ffa ppe l l a ntt ofil et hei ns t a ntc ol l e c t i ons ui ti nc our t .
I nvi e wo ft her e v o c a t i o nl e t t e re x e c ut e di nt hena me mea nd b e ha l fo fJ e s usbe i ngc o ns i de r e d e x i s t i nga ndv a l i d,t heRTC f o undt ha tYuj ui c oma yc o nt i nuet ob ehe l dr e s po ns i b l eonl yf o r l oa nsa ndo bl i g at i o nso fYL TCa l r e a dyc o nt a c t e da soft het i met hel e t t e rwa ss e n tb utno ta f t e r t her e v o c a t i onswa sma ma de .I tf o l l o ws wst he nt ha tde f e nda ntYuj ui c oc a nno tb ehe l dl i a bl ef o rt he m. m.
t he ro rno tJ e s us ’unde r t a ki ngwa st ha tofas ur e t yt ha thei ss o l i da r i l yl i a bl ewi t h I SSUE:Whe Ge nba nk.
HELD: YES.Theunde r t a ki ngo fJ e s u swa st ha tofas ur e t y , no tagua r a nt or
I ti sa ppa r e ntt ha tt hec o ur t sbe l o w,a swe l la st hepe t i t i one r ,i nt e r c ha ng e abl yus e dt het e r ms guar ant y and s ur et yi n char act er i zi ng t he under t aki ngs of J es us undert he cont i nui ng gua r a nt i e s .Thet e r msa r edi s t i nc tf r om e a c ho t he r ,ho we v e r ,a ndt hedi s t i nc t i oni se xpr e s s l y de l i ne a t e di nt heCi vi lCo deunde rAr t i c l e2 0 4 7 .I fape r s o nbi ndshi ms e l fs o l i da r i l ywi t ht he pr i nc i pa lde bt or , t hec ont r a c ti sc a l l e das ur e t ys hi p.
Thus ,i ngua r a nt y ,t hegua r a nt or" bi ndshi ms e l ft ot hec r e di t ort of ul fil lt heobl i g at i ono ft he pr i nc i pa lde bt ori nc a s et hel a t t e rs h oul df a i lt o do s o . "Thel i a bi l i t yo ft hegua r a nt ori s s e c o nda r yt ot ha to ft hepr i nc i pa lde bt orbe c a us eh e" c a nno tbec o mpe l l e dt opa yt hec r e di t o r unl e s st hel a t t e rha se xha us t e da l lt hepr ope r t yoft hede bt or ,a ndha sr e s or t e dt oa l lt hel e ga l r e me di e saga i ns tt hede bt or . "I nc ont r a s t ,t hes ur e t yi ss o l i da r i l yboundt ot heobl i ga t i onoft he pr i nc i pa lde bt or .
Al t ho ug ht hefir s tpa r to ft hec o nt i nui ngg ua r a nt i e ss ho we dt ha tJ e s usa st hes i g na t o r yha d a gr e e dt obeb ound" e i t he ra sg ua r a nt o ro ro t he r wi s e , "t heus a g eo ft e r m gua r a nt yo rg ua r a nt e e i nt hec a pt i o no ft hedo c ume nt s ,o ro ft hewo r dg ua r a nt o ri nt hec o nt e nt so ft hedo c ume nt sdi d no tc o nc l us i v e l yc h ar a c t e r i z et hena t ur eo ft heo bl i g at i o nsa s s u me dt he r e i n.Wha tpr o pe r l y c har ac t er i zed and defined t he under t aki ngswer et hec ont ent soft he document sand t he b e l ,I nc .v . i nt e nt i o no ft hepa r t i e s . I nho l di ngt ha tt hec o nt i nui nggua r a nt ye x e c ut e di n E.Zo sas u r e t yi ns t e a do fagua r a nt y ,t heCo ur ta c c e n t e dt hedi s t i nc t i o nsbe t we e n Co ur to fAp pe a l swa t he m,vi z . :
Ac o nt r a c to fs ur e t yi sa na c c e s s o r ypr o mi s eb ywhi c hape r s o nb i ndsh i ms e l ff o ra no t he ra l r e a dy bound,andagr e e swi t ht hec r e di t ort os at i s f yt heobl i gat i oni ft hede bt ordoe snot .A c ont r ac tof gua r a nt y ,o nt heo t he rha nd,i sac o l l a t e r a lunde r t a ki ngt opa yt hede b to fa no t he ri nc a s et he l a t t e rdo e sno tp a yt hede bt .
S t r i c t l ys pe a ki ng,gua r a n t yands ur e t yar ene a r l yr e l a t e d,a ndma nyoft hepr i nc i pl e sa r ec o mmo n t ob ot h.Ho we v e r ,unde ro urc i vi ll a w,t he yma yb edi s t i ng ui s h e dt hus : As u r e t yi sus u a l l yb ound wi t h hi spr i nci palby t he s ame i ns t r ument ,ex ec ut ed att he s ame t i me,and on t he s ame consi der at i on.He i san or i gi nalpr omi s s or y and debt orf r om t he begi nni ng,and i shel d, or di na r i l y ,t okno we v er yde f a ul tofhi spr i nc i pa l .Us ua l l y ,hewi l lno tb edi s c h ar g e d,e i t he rb yt he me r ei ndul g e nc eoft hec r e di t o rt ot hepr i nc i pa l ,o rby wa nto fn ot i c eoft hede f a ul to ft he pr i nci pal ,nomat t erhow muchhemaybei nj ur edt her eby.Ont heot herhand,t hecont r actof
gua r a n t yi st hegua r a n t o r ' so wns e p ar a t eunde r t a ki ng,i nwhi c ht hepr i nc i pa ldoe sno tj o i n.I ti s us ua l l ye nt e r e di nt ob ef o r eora f t e rt ha to ft hepr i nc i pa l ,a ndi sof t e ns uppo r t e do n as e pa r a t e c o ns i de r a t i on f r o m t ha ts u ppo r t i ngt hec o nt r a c to ft hepr i nc i pa l .Theor i gi na lc ont r a c to fhi s pr i nc i pa li sno th i sc o nt r a c t , a ndhei sno tb oundt ot a keno t i c eofi t sn onpe r f or ma nc e .Hei so f t e n di s c h ar g e db yt heme r ei ndul g enc eo ft hec r e di t ort ot h epr i nc i pa l ,a ndi sus ua l l yno tl i a bl eunl e s s no t i fie doft hede f a ul toft hepr i nc i pa l .
S i mpl yput ,as u r e t yi sdi s t i ng ui s h e df r o m ag ua r a nt yi nt ha tagua r a nt o ri st hei ns u r e ro ft he s o l v e nc yo ft hede b t o ra ndt husb i ndshi ms e l ft opa yi ft hepr i nc i pa li suna bl et opa ywhi l ea s ur e t yi st hei ns ur e roft hede bt ,a ndheobl i ga t e shi ms e l ft opa yi ft hepr i nc i pa ldoe sno tpa y .
Wi t ht hes t i pul a t i onsi nt hec ont i nui nggua r a nt i e si ndi c a t i ngt ha thewa st hes ur e t yoft hec r e di t l i nee x t e nde dt oYL TC,J e s u swa ss o l i da r i l yl i a bl et oGe nb ankf o rt hei nde bt e dne s so fYL TC.I n ot herwor ds ,het her eby r ender ed hi ms el f" di r ec t l y and pr i mar i l yr es pons i bl e"wi t h YLTC, " wi t houtr e f e r e nc et ot hes ol v enc yoft hepr i nc i pa l . ”
