G.R. No. 144339 August 9, 2006
TIU HIONG GUAN, LUISA DE VERA TIU, JUANITO RELLERA and PURITA RELLERA, Petitioners, vs. METROPOLITAN BANK & TRUST COMPANY, Respondent.

FACTS

Petitioners, in their personal and official capacities for their corporation Sunta Rubberized Industrial Corporation (Sunta), executed a Continuing Surety Agreement, jointly and severally binding themselves to pay all loans and credit accommodations obtained, not exceeding three million pesos. They subsequently opened an irrevocable Commercial Letter of Credit and executed a Trust Receipt Agreement for raw materials, and also obtained a loan. After maturity, the obligations remained unpaid. Respondent bank filed a complaint for collection.
In their defense, petitioners argued they signed the agreements only as corporate officers of Sunta and did not personally benefit. They attributed Sunta’s default to force majeure, specifically a fire that destroyed its factory and assets, and to a Securities and Exchange Commission (SEC) order suspending claims against Sunta. They contended that the real party-in-interest was Sunta, and as mere agents or guarantors, they should not be held liable, especially since the corporation’s assets had not been exhausted.

ISSUE

Whether petitioners can be held personally and solidarily liable for the unpaid corporate obligations.

RULING

Yes. The Supreme Court affirmed the lower courts’ decisions, holding petitioners solidarily liable. The legal logic is anchored on the explicit terms of the contracts they voluntarily executed. The Continuing Surety Agreement clearly established their solidary liability with Sunta as sureties. Under Article 2047 of the Civil Code, a suretyship creates a solidary obligation with the debtor unless the contract provides otherwise. Here, the agreement stipulated that their liability was “direct and immediate,” not contingent upon prior recourse against the principal debtor, Sunta.
The defense that they signed only as corporate officers is unavailing. The agreements expressly bound them in their personal capacities, creating a direct obligation on their part independent of the corporate obligation. The principle of separate corporate personality cannot shield them from liability they expressly assumed in clear and unequivocal terms. Furthermore, the defense of force majeure (the fire) and the SEC suspension order do not extinguish their personal, solidary undertaking as sureties. Their obligation under the surety agreement is demandable upon the principal’s default, regardless of the cause. The contracts are the law between the parties, and petitioners are bound by their stipulations.