Case Digest (G.R. No. 172041) Core Legal Reasoning Model
Facts:
In Gateway Electronics Corporation v. Asianbank Corporation, decided on December 18, 2008 under the 1987 Constitution, petitioner Gateway Electronics Corporation (Gateway), a domestic semiconductor company, and its president, Geronimo B. de los Reyes Jr., executed nearly identical deeds of suretyship on July 23, 1996 securing a ₱10 million Domestic Bills Purchased Line and a US$3 million Omnibus Credit Line in favor of respondent Asianbank Corporation. Thereafter, Asianbank extended export-packing loans totalling US$1,700,883.48, consolidated in Promissory Note No. FCD-0599-2749 and secured by a USD 2 million chattel mortgage over Gateway’s equipment. Following repeated maturity extensions and dishonored checks, Gateway defaulted, whereupon Asianbank sued Gateway, Geronimo, and another surety, Andrew S. de los Reyes, in Makati RTC (Civil Case No. 99-2102). On October 7, 2003, the RTC held all defendants jointly and severally liable for US$2,235,452.17 plus interest, penalties,
Case Digest (G.R. No. 172041) Expanded Legal Reasoning Model
Facts:
- Parties and Preliminary Agreements
- Gateway Electronics Corporation (Gateway) – domestic corporation in the semi-conductor business; Geronimo B. delos Reyes, Jr. (Geronimo) – president; Andrew S. delos Reyes – executive vice-president.
- July 23, 1996: Geronimo and Andrew each executed a Deed of Suretyship in favor of Asianbank Corporation, securing:
- PhP 10,000,000 Domestic Bills Purchased Line
- US$3,000,000 Omnibus Credit Line
- Loan Transactions, Default, and Security
- Asianbank extended export packing loans to Gateway totalling US$1,700,883.48, later consolidated under Promissory Note No. FCD-0599-2749 and secured by a USD 2 million chattel mortgage on Gateway’s equipment.
- Gateway defaulted despite extensions of maturity; checks issued July 15 and 30, 1999 (USD 40,000 and USD 20,000) were dishonored. By November 23, 1999, total obligation reached US$2,235,452.17.
- Procedural History
- December 15, 1999: Asianbank filed Civil Case No. 99-2102 (Makati RTC) against Gateway, Geronimo, and Andrew for sum of money. Defenses included lack of consent to extensions and spousal consent.
- October 7, 2003: RTC rendered judgment jointly and severally against defendants for US$2,235,452.17 plus interest, penalties, attorney’s fees (20%), and costs.
- Gateway and Geronimo appealed to the Court of Appeals (CA-G.R. CV No. 80734).
- November 10, 2004: Gateway filed petition for voluntary insolvency (SEC Case No. 037-04, RTC Imus, Cavite); Asianbank listed as creditor.
- October 28, 2005: CA affirmed RTC judgment; March 17, 2006: CA denied motions for reconsideration.
- Petition for review under Rule 45 filed before the Supreme Court.
Issues:
- Whether an insolvency order vests exclusive jurisdiction over claims against Gateway in the insolvency court, requiring dismissal of pending actions.
- Whether the CA erred in admitting a photocopy of the Deed of Suretyship without producing the original.
- Whether repeated extensions of Gateway’s loan maturities without Geronimo’s consent:
- Extinguished his obligation as surety.
- Rendered the Deed of Suretyship absurdly broad.
- Prevented exercise of his right of subrogation.
- Whether Asianbank’s alleged deviation from normal banking practices (extending loans, delaying foreclosure) relieved Geronimo from liability.
- Whether the Court should invoke its equity jurisdiction (“balance of equities”) to relieve Geronimo from his surety obligations.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)