G.R. No. 193138 - Saludo, Jr. vs. Philippine National Bank

In 1986, petitioner Pacionaria C. Baylon introduced private respondent Leonila Tomacruz to Rosita B. Luanzon as a long-time contractor and induced Tomacruz to lend Luanzon ₱150,000 at 5% monthly interest.
On June 22, 1987, Luanzon signed a promissory note promising to pay Tomacruz ₱150,000 on or before August 22, 1987, and issued a postdated Solidbank check dated August 22, 1987. Baylon signed beneath “Guarantor.” Luanzon later replaced this check with another postdated check dated December 22, 1987, and issued additional postdated checks of ₱7,500 each representing monthly interest.

On May 8, 1989, Tomacruz filed a collection case with the RTC of Quezon City, Branch 88, impleading Luanzon, Baylon, and her husband Mariano Baylon. Summons was never served on Luanzon.
Baylon denied guaranteeing a loan, claiming the ₱150,000 was an investment in Luanzon’s business; asserted the benefit of excussion (failure to exhaust Luanzon’s assets) and argued she was released as guarantor by the extension of the maturity date without her consent.

RTC Decision (June 14, 1990): Found a loan relationship; held Baylon liable as guarantor and ordered payment of ₱150,000 plus legal interest, attorney’s fees, and costs.
Court of Appeals Decision (November 29, 1991) and Resolution (April 27, 1993): Affirmed the RTC and denied Baylon’s motion for reconsideration.
Supreme Court: Granted certiorari under Rule 45, reviewed the CA decision, and resolved key legal issues.

Whether the transaction between Tomacruz and Luanzon was a loan or an investment.
Whether Baylon, as guarantor, can be held liable absent exhaustion of Luanzon’s property and without a judgment against Luanzon.
Whether the extension of the note’s maturity date without Baylon’s consent released her from the guaranty.