Santos v. Vibar
REITERATIONFacts
The Antecedents: Petitioner Cecilia de los Santos (Cecilia) and respondent Priscila Bautista Vibar (Priscila) were former co-workers. Cecilia introduced Jose de Leon (de Leon) to Priscila, who borrowed ₱100,000 from Priscila, with Cecilia signing as guarantor. In 1995, de Leon sought another loan of ₱500,000 from Priscila, with Cecilia and Avelina Conte present. During the signing of the promissory note for ₱500,000, de Leon acknowledged the debt payable within 12 months with 3% monthly interest and a 2% monthly penalty. Cecilia signed as a witness. Atty. Josefina Bautista, Priscila's sister, raised the need for Cecilia to sign as guarantor. De Leon then inserted the word "guarantor" next to Cecilia's name in his own handwriting, to which Cecilia nodded her head. De Leon also added a phrase about submitting TCT No. T-47375 by way of mortgage as security. Procedural History: De Leon failed to pay the loan. Priscila sent demand letters to de Leon and Cecilia. Cecilia remitted ₱15,000 to Priscila for one month's interest but claimed inability to pay the full amount. Priscila filed an adverse claim on the property, which was denied by the Register of Deeds. Priscila then filed an action for recovery of money against de Leon and Cecilia. The Regional Trial Court (RTC) declared de Leon in default and dismissed the complaint against Cecilia for insufficiency of evidence. Upon Priscila's motion for reconsideration, the RTC modified its decision, ruling against de Leon for fraud but affirming the dismissal against Cecilia, stating there was no express consent binding her as guarantor. Priscila appealed to the Court of Appeals (CA). The Petition: The Court of Appeals reversed the RTC's decision regarding Cecilia, declaring her liable as guarantor. The CA found that Cecilia's conduct during the signing, including her nod of approval and silence when the word "guarantor" was inserted, constituted implied consent and estopped her from denying her liability. Cecilia's motion for reconsideration was denied, leading to the present petition for review on certiorari.
Issue(s)
Whether Cecilia is liable as guarantor of Jose de Leon's loan. Whether Cecilia's conduct during the signing of the promissory note constituted implied consent to be a guarantor, and whether she is estopped from denying her liability as guarantor. On the conflict between trial court and appellate court findings.
Ruling
The petition is DENIED. The Decision of the Court of Appeals dated 29 June 2001 and its Resolution dated 21 November 2001 in CA-G.R. CV No. 66605 are AFFIRMED.
Ratio Decidendi
On the issue of Cecilia's liability as guarantor: The Court ruled that Cecilia is liable as a guarantor. The Court found that the insertion of the word "guarantor" beside Cecilia's name on the promissory note, although handwritten, was made with her express consent, evidenced by her act of nodding her head when the word was inserted. This act signified her assent to be bound as a guarantor. Furthermore, the Court considered that Priscila would not have extended the larger loan of ₱500,000 without Cecilia's guaranty, especially given Cecilia's active role in arranging the first loan and her prior guaranty. The Court also noted that Cecilia acknowledged her liability as guarantor in meetings with Priscila and her counsel before the case was filed, even making a partial payment of ₱15,000. Her letter to the Register of Deeds, stating she "appears to be a guarantor," was considered a written admission of her status. The Court applied the rule that written words control printed words in an instrument, thus the handwritten "guarantor" prevailed over the typewritten "witness." On the issue of implied consent and estoppel: The Court held that Cecilia's conduct demonstrated implied consent and gave rise to estoppel in pais. Her act of nodding her head and smiling when the word "guarantor" was inserted, coupled with her failure to object, constituted voluntary assent. Her subsequent actions, including the partial payment and the letter to the Register of Deeds, further affirmed her obligation as guarantor. The Court reiterated the principle of estoppel, stating that a person cannot adopt an inconsistent position if it results in injury to another who rightfully relied on the representation or silence. Cecilia's consistent acknowledgment of her liability, until the filing of the case, estopped her from denying her status as guarantor. On the conflict between trial court and appellate court findings: The Court acknowledged that the case presented conflicting findings of fact between the RTC and the CA. However, it asserted its power to review such findings when they are contrary, as in this instance. The Court found the evidence and the reasoning of the CA more persuasive, leading to the affirmation of the appellate court's decision holding Cecilia liable as guarantor.
Main Doctrine
A person may be held liable as a guarantor based on their conduct, actions, and admissions, even in the absence of an express written undertaking, particularly when such conduct induces another to rely on the representation of guaranty, leading to the application of estoppel in pais. In cases of conflict between written and printed words in an instrument, the written words control the printed form.