Case Digest (G.R. No. 113931)
Facts:
E. Zobel, Inc. v. Court of Appeals, Consolidated Bank and Trust Corporation, and Spouses Raul and Elea R. Claveria, G.R. No. 113931, May 06, 1998, the Supreme Court Second Division, Martinez, J., writing for the Court.Respondent spouses Raul and Elea Claveria, doing business as Agro Brokers, obtained a loan from respondent Consolidated Bank and Trust Corporation (now SOLIDBANK) for P2,875,000 to finance two barges and a tugboat. The bank conditioned the loan on a chattel mortgage over the vessels and on a continuing guaranty executed by Ayala International Philippines, Inc. (now petitioner E. Zobel, Inc.). The spouses and petitioner executed the chattel mortgage and the instrument titled “Continuing Guaranty.”
After the spouses defaulted, SOLIDBANK filed a complaint for sum of money with prayer for preliminary attachment against the spouses and petitioner in the Regional Trial Court (RTC) of Manila (Civil Case No. 91-55909). Petitioner moved to dismiss, arguing its liability was extinguished under Article 2080 of the Civil Code because the bank failed to register the chattel mortgage, thereby preventing subrogation to the bank’s rights. SOLIDBANK countered that petitioner was a surety, not a guarantor.
On February 18, 1993, the RTC (Branch 51) denied petitioner’s motion to dismiss, concluding that the “Continuing Guaranty,” notwithstanding its title, imposed suretyship obligations on petitioner and thus Article 2080 did not apply; the RTC denied reconsideration on April 26, 1993. Petitioner filed a petition for certiorari before the Court of Appeals claiming grave abuse of discretion; the Court of Appeals dismissed the petition on July 13, 1993 and denied reconsideration on February 15, 1994.
Petitioner filed a petition for review on ce...(Pro-only)
Issues:
- Is petitioner’s obligation under the instrument titled “Continuing Guaranty” a guaranty (to which Art. 2080 of the Civil Code applies) or a contract of suretyship?
- If petitioner is a surety, does Article 2080 of the Civil Code apply to relieve petitioner of liability?
- Did SOLIDBANK’s alleged failure to register the chattel mortgage extinguish petitioner’s liabilit...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)