7/23/2019 54.Ong v PCIB Guaranty and Surety

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G.R. No. 160466January 17, 2005SPOUSES ALFREDO and SUSANA ONG v . P!"L"PP"NE #O$$ER#"AL "N%ERNA%"ONAL&AN'

FA#%S : Petitioners-spouses Alfredo and Susana Ong are the President and Treasurer ofBaliwag Mahogany Corporation (BMC). espondent Philippine Co!!er"ial #nternational Ban$(now %&uita'le-Philippine Co!!er"ial #nternational Ban$ or %-PC#B) filed a "ase for "olle"tionof a su! of !oney against petitioners-spouses and sought to hold the! lia'le as sureties on thethree ( ) pro!issory notes they issued to se"ure so!e of BMC s loans.

The "o!plaint alleged that in *++*, BMC needed additional "apital for its 'usiness and appliedfor arious loans, a!ounting to a total of fi e !illion pesos, with the respondent 'an$.Petitioners-spouses a"ted as sureties for these loans and issued three ( ) pro!issory notes forthe purpose. nder the ter!s of the notes, it was stipulated that respondent 'an$ !ay "onsiderde'tor BMC in default and de!and pay!ent of the re!aining 'alan"e of the loan upon the le y,atta"h!ent or garnish!ent of any of its properties, or upon BMC s insol en"y, or if it is de"laredto 'e in a state of suspension of pay!ents. espondent 'an$ granted BMC s loan appli"ations.

BMC filed a petition for reha'ilitation and suspension of pay!ents with the S%C after itsproperties were atta"hed 'y "reditors. espondent 'an$ "onsidered de'tor BMC in default of itso'ligations and sought to "olle"t pay!ent thereof fro! petitioners-spouses as sureties.

On O"to'er * , *++/, a Me!orandu! of Agree!ent (MOA) was e0e"uted 'y de'tor BMC, thepetitioners-spouses as President and Treasurer of BMC, and the "onsortiu! of "reditor 'an$s of BMC (of whi"h respondent 'an$ is in"luded). The MOA too$ effe"t upon its appro al 'y the S%C

on 1o e!'er /2, *++/.

Thereafter, petitioners-spouses !o ed to dis!iss the "o!plaint. They argued that as the S%Cde"lared the prin"ipal de'tor BMC in a state of suspension of pay!ents and, under the MOA,the "reditor 'an$s, in"luding respondent 'an$, agreed to te!porarily suspend any pending "i ila"tion against the de'tor BMC, the 'enefits of the MOA should 'e e0tended to petitioners-spouses who a"ted as BMC s sureties in their "ontra"ts of loan with respondent 'an$.Petitioners-spouses a erred that respondent 'an$ is 'arred fro! pursuing its "olle"tion "asefiled against the!.

Petitioners "ontend that it would pre3udi"e the! if the prin"ipal de'tor BMC would en3oy thesuspension of pay!ent of its de'ts while petitioners, who a"ted only as sureties for so!e ofBMC s de'ts, would 'e "o!pelled to !a$e the pay!ent. Petitioners add that "o!pelling the! topay is "ontrary to Arti"le /45 of the Ci il Code whi"h pro ides that a "o!pro!ise 'etween the"reditor and prin"ipal de'tor 'enefits the guarantor and should not pre3udi"e the latter. 6astly,petitioners rely on Arti"le /47* of the Ci il Code whi"h pro ides that: 8the guarantor !ay set upagainst the "reditor all the defenses whi"h pertain to the prin"ipal de'tor and are inherent in thede't9 'ut not those whi"h are purely personal to the de'tor.8

7/23/2019 54.Ong v PCIB Guaranty and Surety

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"SSUE : O1 the "olle"tion suit filed 'y respondent 'an$ against petitioners-spouses assureties "an prosper. ;%S

!ELD : elian"e of petitioners-spouses on Arti"les /45 and /47* of the Ci il Code is !ispla"ed

as these pro isions refer to "ontra"ts of guaranty. They do not apply to suretyship "ontra"ts. Aguarantor insures the sol en"y of the de'tor while a surety is an insurer of the de't itself. A"ontra"t of guaranty gi es rise to a su'sidiary o'ligation on the part of the guarantor. #t is onlyafter the "reditor has pro"eeded against the properties of the prin"ipal de'tor and the de'tre!ains unsatisfied that a guarantor "an 'e held lia'le to answer for any unpaid a!ount. This isthe prin"iple of e0"ussion. #n a suretyship "ontra"t, howe er, the 'enefit of e0"ussion is nota aila'le to the surety as he is prin"ipally lia'le for the pay!ent of the de't. As the suretyinsures the de't itself, he o'ligates hi!self to pay the de't if the prin"ipal de'tor will not pay,regardless of whether or not the latter is finan"ially "apa'le to fulfill his o'ligation. Thus, a"reditor "an go dire"tly against the surety although the prin"ipal de'tor is sol ent and is a'le topay or no prior de!and is !ade on the prin"ipal de'tor. A surety is dire"tly, e&ually anda'solutely 'ound with the prin"ipal de'tor for the pay!ent of the de't and is dee!ed as anoriginal pro!issor and de'tor fro! the 'eginning.

nder Arti"le */*5 of the Ci il Code, respondent 'an$ as "reditor !ay pro"eed againstpetitioners-spouses as sureties despite the e0e"ution of the MOA whi"h pro ided for thesuspension of pay!ent and filing of "olle"tion suits against BMC. espondent 'an$ s right to"olle"t pay!ent fro! the surety e0ists independently of its right to pro"eed dire"tly against theprin"ipal de'tor.