Philippine National Bank v. Independent Planters Association, Inc.
REITERATIONFacts
The Antecedents: The Philippine National Bank (PNB) filed a complaint against several solidary debtors for the collection of a sum of money. Procedural History: During the pendency of the case, after the plaintiff had presented its evidence, one of the defendants, Ceferino Valencia, died. The trial court dismissed the complaint on the ground that the money claim should be prosecuted in the testate or intestate proceeding for the settlement of the estate of the deceased defendant, pursuant to Section 6 of Rule 86 of the Rules of Court. The Petition: The PNB appealed the order of dismissal, invoking its right of recourse against one, some, or all of its solidary debtors under Article 1216 of the Civil Code.
Issue(s)
Whether the death of one defendant in an action for collection of a sum of money based on contract against solidary debtors deprives the court of jurisdiction to proceed with the case against the surviving defendants. Whether Section 6 of Rule 86 of the Rules of Court prevails over Article 1216 of the Civil Code in cases involving solidary obligations where one debtor dies during litigation.
Ruling
The appealed order of dismissal is set aside in respect of the surviving defendants, and the case is remanded to the corresponding Regional Trial Court for proceedings.
Ratio Decidendi
On the issue of jurisdiction and the effect of a defendant's death in a solidary obligation: The Court held that the death of one defendant in an action for collection of a sum of money based on contract against solidary debtors does not deprive the court of jurisdiction to proceed with the case against the surviving defendants. Article 1216 of the Civil Code grants the creditor the substantive right to seek satisfaction of his credit from one, some, or all of his solidary debtors, as he deems fit or convenient for the protection of his interests. The creditor's choice to proceed against the surviving solidary debtors is not an obstacle to the continuation of the case against them, even if one of the co-debtors has died during the pendency of the suit. The Court reiterated that Section 6 of Rule 86 of the Rules of Court provides the procedure should the creditor desire to go against the deceased debtor's estate, but it does not make compliance with such procedure a condition precedent before an ordinary action against the surviving solidary debtors could be entertained to the extent that failure to observe the same would deprive the court of jurisdiction over the action against the survivors. The substantive right granted by the Civil Code cannot be diminished by a procedural rule. On the conflict between Article 1216 of the Civil Code and Section 6 of Rule 86 of the Rules of Court: The Court clarified that Article 1216 of the Civil Code, being a substantive law, prevails over Section 6 of Rule 86 of the Rules of Court, which is merely procedural. If Section 6 of Rule 86 were applied literally, it would, in effect, repeal the creditor's right under Article 1216 to proceed against any one, some, or all of the solidary debtors. Such a construction is not sanctioned by the principle that a substantive law cannot be amended by a procedural rule. Therefore, the creditor has the option to proceed against the surviving solidary debtors without the necessity of filing a claim in the estate of the deceased debtor.
Main Doctrine
In an action for collection of a sum of money based on contract against solidary debtors, the death of one defendant during the pendency of the case does not deprive the court of jurisdiction to proceed with the case against the surviving defendants, as the creditor may still pursue recourse against any of the solidary debtors under Article 1216 of the Civil Code.