Goldenrod, Inc. v. Court of Appeals
REITERATIONFacts
The Antecedents: Petitioner Goldenrod, Inc. obtained a loan of P76,000,000.00 from respondent Pathfinder Holdings (Phils.), Inc., evidenced by a promissory note with a maturity date of September 28, 1988. Co-petitioner Sonia G. Mathay executed a 'Joint and Several Guarantee' as surety. Goldenrod, Inc. failed to pay on maturity. On April 27, 1989, Goldenrod, Inc. offered to settle, and respondent prepared a statement of account amounting to P95,069,609.00. Goldenrod, Inc. paid P85,000,000.00 via two checks. On the same day, Goldenrod, Inc. executed two promissory notes (PN No. G1-89-100 and G1-89-101) for P5,000,000.00 each, totaling P10,000,000.00, with maturity dates on July 26, 1989, and October 24, 1989, respectively. As security, a real estate mortgage was executed by Goldenrod, Inc. through Mathay, but it was not notarized. Goldenrod, Inc. failed to pay the P10,000,000.00 principal on the two promissory notes upon maturity. Respondent sent a demand letter dated April 1, 1991, stating the total obligation with accrued interest and liquidated damages amounted to P30,667,833.33 as of March 31, 1991. Procedural History: On April 1, 1991, respondent filed a complaint for judicial foreclosure of the real estate mortgage. The Regional Trial Court (RTC) rendered judgment ordering defendants to pay jointly and severally P30,667,833.33, 5% attorney's fees, and costs, but denied the prayer for judicial foreclosure. Both parties appealed. The Court of Appeals (CA) affirmed the RTC decision with modification, increasing attorney's fees to 10% of the total amount due. Petitioners filed the present petition for review. The Petition: Petitioners question their liability for the amounts stated in the promissory notes and Mathay's solidary liability.
Issue(s)
Whether petitioner Goldenrod, Inc. can be held liable for the amounts stated in the promissory notes. Whether co-petitioner Mathay can be held solidarily liable with petitioner Goldenrod, Inc.
Ruling
The petition is DENIED and the assailed Decision of the Court of Appeals is AFFIRMED. Petitioners are ordered to pay respondent jointly and severally.
Ratio Decidendi
On the first issue (Liability for Promissory Notes): The Court found no merit in petitioners' contention that the two promissory notes for P10,000,000.00 were for a new and separate loan that did not materialize. The Court reiterated that factual findings of the Court of Appeals, especially when affirming those of the trial court, are conclusive and not subject to review. The evidence presented, particularly the testimony of Atty. Cezar Suñaz, the respondent's former vice-president, established that the total indebtedness was P95,069,609.00. Petitioner Goldenrod, Inc. paid P85,000,000.00 in checks and executed two promissory notes worth P10,000,000.00 on the same day, totaling P95,000,000.00. The remaining P69,609.00 was deemed condoned. The term 'full payment' in the check voucher was clarified to mean the receipt of both the checks and the promissory notes, indicating that the promissory notes were intended to cover the balance of the original debt, not a separate loan. The courts a quo gave credence to this testimony over petitioner Mathay's claim, a finding affirmed by the Supreme Court. On the second issue (Mathay's Solidary Liability): The Court determined that the contract denominated as 'Joint and Several Guarantee' executed by petitioner Sonia G. Mathay constituted a contract of suretyship, making her solidarily liable with petitioner Goldenrod, Inc. The Court analyzed provisions 1, 6, and 7 of the contract, which explicitly stated that the undersigned (Mathay and her husband, though only Mathay signed) jointly and severally agreed to pay on demand all sums remaining due and unpaid, with a specified limit on total liability. This language, coupled with the nature of the undertaking to secure the principal debtor's obligation, aligns with the definition of a surety under Article 2047 of the New Civil Code. The Court distinguished this from a mere guaranty, where the benefit of excussion would apply. Citing Rubio v. Court of Appeals, the Court held that such an agreement serves as the law between the parties, and Mathay's signature on the contract made her solidarily liable as a surety for Goldenrod, Inc.'s debt.
Main Doctrine
A contract denominated as 'Joint and Several Guarantee' where a person binds himself to pay on demand all sums remaining due and unpaid to the creditor, and the total liability enforceable against him does not exceed a specified amount, constitutes a contract of suretyship, making the signatory solidarily liable with the principal debtor.