GR L 49401; (July, 1982) (Digest)
G.R. No. L-49401. July 30, 1982. RIZAL COMMERCIAL BANKING CORPORATION, petitioner, vs. HON. JOSE P. ARRO, Judge of the Court of First Instance of Davao, and RESIDORO CHUA, respondents.
FACTS
Petitioner Rizal Commercial Banking Corporation (RCBC) filed a complaint for a sum of money against Davao Agricultural Industries Corporation (Daicor), Enrique Go, Sr., and private respondent Residoro Chua to collect on an unpaid promissory note dated April 29, 1977, in the amount of P100,000. The note was signed by Enrique Go, Sr., both personally and on behalf of Daicor, but was not signed by Chua. Prior to this loan, on October 19, 1976, Chua and Go had executed a Comprehensive Surety Agreement in favor of RCBC, guaranteeing the punctual payment of any existing and future indebtedness of Daicor, with their liability not exceeding P100,000 at any one time.
Respondent Chua moved to dismiss the complaint against him, arguing it stated no cause of action because he was not a signatory to the promissory note. The respondent judge granted the motion, ruling that the surety agreement required a separate instrument evidencing the obligation and, since Chua did not sign the note, he could not be held liable. RCBC’s motion for reconsideration was denied.
ISSUE
Whether private respondent Residoro Chua is liable under the Comprehensive Surety Agreement for the loan evidenced by the promissory note he did not sign.
RULING
Yes. The Supreme Court reversed the orders of dismissal. The legal logic centers on the nature and interpretation of the Comprehensive Surety Agreement. A surety agreement is an accessory contract that secures the performance of a principal obligation. The agreement executed by Chua and Go was explicitly a continuing guaranty, covering both existing and future debts of Daicor, and remained in force until revoked in writing. The promissory note represented a future debt incurred while this agreement was fully effective.
The respondent court erred in requiring Chua’s signature on the promissory note itself to establish his liability. His obligation arose from the separate surety contract, which by its clear terms guaranteed the punctual payment of any indebtedness where Daicor “is or may become liable.” Since Daicor was unquestionably liable as the borrower on the note, Chua’s accessory liability as a solidary guarantor attached automatically under the surety agreement. The Civil Code expressly permits a guaranty for future debts. Therefore, the complaint did state a cause of action against Chua. The case was remanded for further proceedings.