G.R. No. L-59887 August 31, 1982
CHINA BANKING CORPORATION, petitioner, vs. THE HONORABLE COURT OF APPEALS, ESPERANZA T. CUA, MANUEL C. DE LEON AND EMERITA DE LEON, respondents.

FACTS

Petitioner China Banking Corporation filed a complaint for a sum of money against private respondents Esperanza T. Cua and spouses Manuel and Emerita de Leon. The complaint was based on a promissory note dated June 26, 1969, wherein the respondents jointly and severally promised to pay the bank P50,000.00. After a partial payment of P25,000.00 was made, an unpaid balance remained. Cua later requested a renewal of the loan, and the bank prepared a renewal promissory note. However, the De Leon spouses refused to sign this new note. Consequently, the bank unilaterally extended the maturity date of the original obligation. Despite demands, no further payments were made, prompting the bank to sue for the balance.
The Court of First Instance ruled in favor of the bank, holding all respondents jointly and severally liable. It found that the original note contained a clause consenting to any extension requested by any one of the makers, and that the De Leon spouses were accommodation makers liable to a holder for value. On appeal, the Court of Appeals reversed this decision. It held that the De Leon spouses were released from liability due to the bank’s extension of the maturity date without their consent, and declared Cua solely liable.

ISSUE

Whether the Court of Appeals erred in ruling that the De Leon spouses were released from their solidary obligation under the promissory note.

RULING

The Supreme Court held that, on the substantive merits, the Court of Appeals committed reversible error. The original promissory note expressly stipulated that the respondents bound themselves jointly and severally. Crucially, it also contained a provision stating, “I/We hereby consent to any extension which may be requested by anyone of us for the payment of this note.” This clause expressly authorized the extension granted by the bank at the request of co-maker Cua. Therefore, the De Leon spouses’ refusal to sign the renewal note and the subsequent extension did not operate to release them from their solidary obligation under the original contract. There was no novation, as they rejected the new agreement, and the original terms, including their consent to extension, remained binding.
However, the Supreme Court ultimately dismissed the petition. The decision of the Court of Appeals was received by the petitioner on December 29, 1981. Under the rules then in force, it became final and executory on January 13, 1982. The petitioner’s motion for reconsideration was filed only on February 10, 1982, which was beyond the reglementary period. Consequently, the Court of Appeals’ decision had attained finality and could no longer be reviewed on its merits. The petition was dismissed on this procedural ground.