G.R. No. L-48359. March 30, 1993.
MANOLO P. CERNA, petitioner, vs. THE HONORABLE COURT OF APPEALS and CONRAD C. LEVISTE, respondents.

FACTS

On October 16, 1972, Celerino Delgado executed a promissory note in favor of Conrad Leviste for a loan of P17,500.00. On the same date, Delgado executed a chattel mortgage over his own Willy’s jeep and, acting under a Special Power of Attorney, also mortgaged a Taunus car owned by petitioner Manolo P. Cerna to secure the loan. Delgado failed to pay the loan upon its maturity. Leviste filed a collection suit (Civil Case No. 17507) against Delgado and Cerna as solidary debtors. Cerna filed a Motion to Dismiss, arguing lack of cause of action against him, the death of Delgado, and that the filing of the collection suit constituted an abandonment of the chattel mortgage security. The Motion was denied. Cerna filed a petition for certiorari with the Court of Appeals (CA G.R. No. 03088), which was denied. Cerna filed a second Motion to Dismiss on similar grounds, which was again denied. He then filed another petition for certiorari (CA G.R. No. SP-07237). The Court of Appeals dismissed this petition, holding that the chattel mortgage contract prima facie created a joint and solidary obligation between Cerna and Delgado. Cerna filed the instant Petition for Review.

ISSUE

Whether petitioner Manolo P. Cerna, who did not sign the promissory note but whose car was mortgaged by the principal debtor Delgado under a Special Power of Attorney, can be held solidarily liable for the loan in a collection suit filed by the creditor.

RULING

No. The Supreme Court held that Cerna cannot be held solidarily liable. The contract of loan, evidenced by the promissory note, was signed only by Delgado; therefore, only Delgado was bound as the principal debtor. Solidary liability is not presumed and must be expressly stated or required by law or the nature of the obligation. The fact that Cerna’s property was mortgaged to secure the debt does not make him a solidary co-debtor. A third-party mortgagor is not solidarily bound with the principal debtor; his liability extends only to the mortgaged property. Furthermore, the Special Power of Attorney merely authorized Delgado to mortgage Cerna’s property and did not make Cerna a mortgagor or a party to the loan contract. The Court also agreed that the filing of a collection suit by Leviste constituted an abandonment of the remedy of foreclosure of the chattel mortgage. However, the Petition was ultimately dismissed on the procedural ground of res judicata, as the issues raised in the second Motion to Dismiss and subsequent petition were substantially the same as those already resolved with finality in the first certiorari proceeding (CA G.R. No. 03088).