G.R. No. 167082 August 3, 2016
Teresita I. Buenaventura, Petitioner, vs. Metropolitan Bank and Trust Company, Respondent.

FACTS

Petitioner Teresita Buenaventura executed two Promissory Notes (PNs) in favor of respondent Metrobank in 1997, each for ₱1.5 million, with stipulated interest, credit evaluation fees, and an 18% per annum penalty on unpaid principal from date of default. The obligations remained unpaid despite demands. Metrobank filed a collection suit. Buenaventura defended that the PNs were not true loans but were executed merely to secure her rediscounting of three postdated checks received from her nephew, Rene Imperial, as payment for her properties. She argued the transaction was a rediscounting arrangement where the bank effectively subrogated into her rights as creditor against Imperial, making her a mere guarantor. Thus, she contended the bank’s recourse should first be against the principal debtor, Imperial.
The Regional Trial Court ruled in favor of Metrobank, ordering Buenaventura to pay the amounts due under the PNs plus interest, penalties, and attorney’s fees. The Court of Appeals affirmed the RTC decision with modification, specifically detailing the applicable interest and penalty rates. The CA rejected Buenaventura’s arguments, holding her liable as a direct debtor under the clear terms of the promissory notes.

ISSUE

The core issue is whether Buenaventura is liable as a principal debtor under the promissory notes or merely as a guarantor in a rediscounting transaction, and whether the promissory notes are valid and binding contracts.

RULING

The Supreme Court denied the petition and affirmed the CA decision. The Court held Buenaventura liable as a principal debtor under the promissory notes. The legal logic is anchored on the principle that a contract is the law between the parties. The terms of the PNs were clear, unambiguous, and showed a straightforward loan obligation where Buenaventura promised to pay Metrobank a specific sum with interest. Her claim that the PNs were contracts of adhesion did not invalidate them; she voluntarily signed the documents and was bound by their stipulations. A contract of adhesion is not inherently void and obligates parties to comply with its terms.
The Court rejected the argument that the transaction was rediscounting creating a subrogation. The evidence, including the PNs and demand letters, consistently treated Buenaventura as the primary obligor. There was no written contract of guaranty or suretyship to support her claim of being a mere guarantor; such a special promise must be express and in writing to be enforceable. The Court also found no merit in her claim for damages. Consequently, as the obligor under the PNs, she was liable for the principal, stipulated interest, and the 18% per annum penalty, which the Court deemed reasonable and compensatory for the delay. The contract’s terms, including the penalty clause, were valid and enforceable.