GR 151060; (August, 2005) (Digest)
G.R. No. 151060 & 151311. August 31, 2005
JN DEVELOPMENT CORPORATION, SPS. RODRIGO and LEONOR STA. ANA, and NARCISO V. CRUZ, Petitioners, vs. PHILIPPINE EXPORT AND FOREIGN LOAN GUARANTEE CORPORATION, Respondent.
FACTS
Petitioner JN Development Corporation (JNDC) obtained a loan from Traders Royal Bank (TRB), guaranteed up to 70% by respondent PhilGuarantee. Petitioners, including the spouses Sta. Ana and Narciso Cruz, executed a Deed of Undertaking in favor of PhilGuarantee to assure reimbursement if it paid under its guarantee. JNDC defaulted. TRB called on the guarantee, and PhilGuarantee paid TRB. PhilGuarantee then demanded reimbursement from petitioners, who refused to pay.
The Regional Trial Court (RTC) dismissed PhilGuarantee’s complaint. It ruled that the loan obligation was extinguished by the alleged foreclosure of a real estate mortgage securing it, and that PhilGuarantee’s payment after the one-year guarantee period had expired was not legally required. The RTC also found Cruz’s signature on the Undertaking to be forged. The Court of Appeals (CA) reversed the RTC, holding petitioners solidarily liable to reimburse PhilGuarantee.
ISSUE
Whether petitioners are liable to reimburse PhilGuarantee for the amount it paid to TRB under its guarantee.
RULING
Yes, petitioners are liable. The Supreme Court affirmed the CA decision. On the first issue, the Court held that the defense of extinguishment of the principal obligation by foreclosure was unsubstantiated. Petitioners failed to present conclusive evidence, such as a certificate of sale, proving the foreclosure actually occurred. Testimony from Rodrigo Sta. Ana even indicated no notice of foreclosure was received, and he later offered the same property to settle the debt, negating the claim of extinction.
On the second issue, PhilGuarantee’s liability under its guarantee attached when JNDC defaulted within the one-year guarantee period. The actual payment was made after the period, but this did not negate liability as the right to be reimbursed had already accrued. A guarantor may waive the benefit of excussion (the right to demand that the creditor exhaust the debtor’s assets first) under Article 2058 of the Civil Code. By paying TRB, PhilGuarantee effectively waived this right and was entitled to seek immediate reimbursement from the petitioners-debtors.
Finally, the presumption of regularity and due execution accorded to the notarized Deed of Undertaking stands. Cruz failed to present clear and convincing evidence to overcome this presumption and prove forgery. Therefore, all petitioners are solidarily liable to reimburse PhilGuarantee for the amount paid, with legal interest.