G.R. No. 263632 - Chua vs. Bank of Commerce

Petitioners Gil G. Chua and Interbrand Logistics and Distribution, Inc. (Interbrand), along with spouses Edgar and Doris San Luis, spouses Almer and Jane Caras, and Carlos Francisco S. Mijares (collectively, Interbrand et al.) contested the Court of Appeals decision affirming a money judgment in favor of Bank of Commerce (respondent).
Interbrand, a domestic corporation engaged in wholesale and retail trading, secured a loan from respondent bank amounting to PHP 150,000,000.00 in 2009.
To secure the loan, Continuing Suretyship Agreements (CSAs) were issued and signed by petitioners, including Chua and others who were officers, directors, or majority stockholders of Interbrand.

Interbrand received the loan in tranches through its president, petitioner Almer Caras.
The CSAs contained waivers of prior demand, protest, and notices, making the sureties jointly and severally liable.
Interbrand defaulted on its loan obligation, with a total outstanding balance of approximately PHP 154,187,888.89 as of March 15, 2010.

Bank of Commerce filed a complaint for collection of sum of money against Interbrand et al. on April 8, 2010, based on several promissory notes totaling PHP 150 million.
Four years later, the bank moved to amend the complaint to include eight new promissory notes that had matured, which was allowed despite petitioners’ opposition.
Chua denied executing the CSAs, claiming lack of privity and irregularities in the notarization of his CSA.
Interbrand et al. argued the promissory notes were sham or already paid and that the loans were ultra vires.
Respondent’s witness, Atty. Girlie Isabel D. Umali, testified on the authorization of loan securities but had no personal knowledge of the execution of documents related to Chua.

The trial court initially held only Interbrand and Edgar San Luis liable.
The trial court absolved Doris San Luis, spouses Caras, Mijares, and Chua for prematurity or lack of cause of action.
On reconsideration, the court modified the decision, holding all petitioners jointly and severally liable, including Chua.

The Court of Appeals affirmed the joint and several liability of Interbrand et al. and Chua for the unpaid loans, denial of motions for reconsideration.

Petitioners filed petitions for review, arguing (a) clear and convincing evidence of irregularities invalidating Chua’s CSA; (b) no consideration for CSAs executed before promissory notes; (c) improper allowance of amended complaint; and (d) absence of prior demand.

Whether Chua is liable as surety given clear and convincing evidence of irregularities in the notarization and purported execution of the CSA.
Whether Interbrand et al. can be held liable on the basis of CSAs executed before the promissory notes due to lack of consideration.
Whether the trial court erred in allowing the amended complaint to include new promissory notes without filing a new complaint.
Whether the waiver of prior demand stipulated in the CSAs is valid and binding.
Whether the interest and penalty rates stipulated in the promissory notes are valid and enforceable.
Whether the award of attorney’s fees in favor of respondent is proper.