GR 74336; (April, 1997) (Digest)
G.R. No. 74336 , April 7, 1997
J. ANTONIO AGUENZA, petitioner, vs. METROPOLITAN BANK & TRUST CO., VITALIADO P. ARRIETA, LILIA PEREZ, PATRICIO PEREZ and THE INTERMEDIATE APPELLATE COURT, respondents.
FACTS
The Board of Directors of Intertrade & Marketing Co., Inc., through a resolution, authorized its President, J. Antonio Aguenza, and its Executive Vice-President, Vitaliado Arrieta, to jointly apply for and open credit lines with Metropolitan Bank & Trust Company (Metrobank). Pursuant to this authority, Aguenza and Arrieta executed a Continuing Suretyship Agreement on March 14, 1977, binding themselves jointly and severally with Intertrade to pay Metrobank for any obligation incurred by the corporation, not exceeding P750,000. This surety secured several trust receipts issued for Intertrade, which were fully settled by March 1978.
Subsequently, on March 21, 1978, Vitaliado Arrieta and Intertrade’s bookkeeper, Lilia Perez, obtained a personal loan of P500,000 from Metrobank, evidenced by a promissory note signed only by them. They defaulted on the payments. Metrobank filed a collection suit and later amended its complaint to implead Aguenza, claiming his liability under the 1977 Continuing Suretyship Agreement for this personal loan taken by Arrieta and Perez.
ISSUE
Whether petitioner J. Antonio Aguenza is liable under the Continuing Suretyship Agreement for the personal loan obligation of private respondents Vitaliado Arrieta and Lilia Perez.
RULING
No. The Supreme Court reversed the Court of Appeals and reinstated the trial court’s decision absolving Aguenza from liability. The legal logic is anchored on the nature and strict interpretation of suretyship contracts. A contract of surety is never presumed; it must be express and cannot extend beyond its stipulated terms. It is strictly construed against the creditor, with every doubt resolved against enlarging the surety’s liability.
The Continuing Suretyship Agreement executed by Aguenza and Arrieta was specifically tied to the corporate credit line authority granted by Intertrade’s board resolution. Its purpose was to guarantee obligations incurred by the corporation, Intertrade, within that authorized credit line. The P500,000 loan obtained by Arrieta and Perez was a personal undertaking, evidenced by their promissory note, and was not shown to be a corporate obligation of Intertrade. Since the surety agreement did not cover personal debts of corporate officers acting in their individual capacity, Aguenza’s liability as a surety cannot be extended to this separate, personal transaction. The obligation secured by the surety had been extinguished with the full payment of the corporate trust receipts, and the new loan was a distinct, unsecured personal obligation.