GR 124049; (June, 1999) (Digest)
G.R. No. 124049 . June 30, 1999.
RODOLFO P. VELASQUEZ, petitioner, vs. COURT OF APPEALS and PHILIPPINE COMMERCIAL INTERNATIONAL BANK, INC., respondents.
FACTS
Petitioner Rodolfo P. Velasquez, an officer and stockholder of Pick-up Fresh Farms, Inc. (PUFFI), executed a deed of suretyship in favor of respondent Philippine Commercial International Bank (PCIB) to secure a corporate loan. Upon PUFFI’s default, PCIB foreclosed the accompanying chattel mortgage and filed a collection suit against the sureties, including Velasquez. The trial court declared Velasquez in default for failure to appear at pre-trial despite notice. PCIB moved for summary judgment. Velasquez, while in default, adopted a co-defendant’s position paper. The trial court rendered a summary judgment holding Velasquez solidarily liable.
The Court of Appeals affirmed. Velasquez filed this petition, arguing the summary judgment was improper due to genuine triable issues and that the default order should be lifted.
ISSUE
Whether the Court of Appeals erred in: (1) affirming the summary judgment despite alleged triable issues of fact, and (2) refusing to set aside the order of default.
RULING
The Supreme Court denied the petition, affirming the appellate court’s decision. On the first issue, the Court held that a summary judgment under Rule 35 was proper as there was no genuine issue as to any material fact. Petitioner contended he signed the deed of suretyship only in his corporate capacity, not personally, citing ambiguous terms. The Court applied the “complementary contracts construed together” doctrine, interpreting the surety contract with the principal loan agreement as required by Article 1374 of the Civil Code. A clear reading showed petitioner undertook personal, solidary liability, rendering his defense unsubstantial and legal, not factual. Summary judgment is appropriate when alleged issues are not genuine but contrived.
On the second issue, the Court found no merit in lifting the default order. Petitioner claimed his lawyer’s failure to attend the pre-trial due to a special power of attorney constituted excusable negligence. The Court ruled that both petitioner and his counsel were negligent. Petitioner executed the power of attorney, went abroad, and subsequently ignored his case. The lawyer received the default order but took no action to lift it. A client is generally bound by counsel’s mistakes, and more so by his own neglect. No fraud, accident, mistake, or excusable negligence warranted setting aside the default.