Facts:

The case involves the Philippine National Bank (PNB) as the petitioner and several private respondents, namely Fabar Incorporated, Jose Ma. Barredo, Carmen B. Borromeo, and Tomas L. Borromeo. On January 16, 1963, PNB extended various credit accommodations to Fabar Incorporated, which included a discounting line, an overdraft line, a temporary overdraft line, and letters of credit for the importation of machinery and equipment. Additionally, PNB provided advances for insurance premiums related to the chattels mortgaged to secure these credit accommodations. By May 13, 1977, the outstanding balance of these credit accommodations amounted to P8,449,169.98. The obligations were secured by the joint and several signatures of the private respondents and Manuel H. Barredo.

Due to the private respondents' failure to fulfill their obligations despite repeated demands, PNB filed a collection case against all private respondents and Manuel H. Barredo on October 31, 1972, before t...

Facts:

1. Credit Accommodations and Advances:

   • On January 16, 1963, the Philippine National Bank (PNB) granted various credit accommodations and advances to Fabar Incorporated, including a discounting line, overdraft line, temporary overdraft line, and letters of credit for importing machinery and equipment.
   • PNB also advanced insurance premiums for the chattels mortgaged to secure these credit accommodations.
   • The outstanding balance of these obligations amounted to P8,449,169.98 as of May 13, 1977.

2. Solidary Obligation:

   • The credit accommodations were secured by the joint and several signatures of Jose Ma. Barredo, Carmen B. Borromeo, Tomas L. Borromeo, and Manuel H. Barredo, making them solidary debtors.

3. Failure to Pay and Filing of Complaint:

   • Due to the private respondents' failure to pay their obligations despite repeated demands, PNB filed a collection case against all respondents, including Manuel H. Barredo, on October 31, 1972, before the Court of First Instance of Manila, Branch XII, presided by Judge Elias B. Asuncion.

4. Death of Manuel H. Barredo:

   • On May 19, 1975, Manuel H. Barredo died before the case could be decided.
   • Private respondents' counsel informed the court of Barredo's death in a Manifestation dated June 6, 1975.

5. Dismissal of the Case:

   • On November 29, 1976, the respondent court dismissed the case, citing Section 6, Rule 86 of the Revised Rules of Court, which states that a money claim does not survive the death of a defendant in a solidary obligation.
   • The court ruled that the claim should be filed against the estate of the deceased debtor.

6. Motion for Reconsideration:

   • PNB filed a motion for reconsideration on December 14, 1976, arguing that the dismissal should only apply to the deceased Manuel H. Barredo and not to the surviving solidary debtors.
   • The respondent court denied the motion on January 26, 1977, prompting PNB to file this petition for review on certiorari.

Issue:

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Ruling:

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Ratio:

1. Applicability of Article 1216 of the New Civil Code:

   • Article 1216 of the New Civil Code grants the creditor the right to proceed against any one, some, or all of the solidary debtors simultaneously.
   • The death of one solidary debtor does not extinguish the obligation of the surviving debtors.

2. Section 6, Rule 86 of the Revised Rules of Court:

   • Section 6, Rule 86 merely provides a procedure for filing claims against the estate of a deceased solidary debtor.
   • It does not mandate that the creditor must first file a claim against the estate before proceeding against the surviving debtors.

3. Procedural Rules Cannot Amend Substantive Rights:

   • Section 6, Rule 86 is a procedural rule and cannot diminish the substantive rights granted under Article 1216 of the New Civil Code.
   • The Supreme Court emphasized that procedural rules cannot amend, diminish, or modify substantive rights.

4. Constitutional Mandate:

   • The New Constitution of the Philippines, under Section 5, Article X, prohibits rules promulgated by the Supreme Court from diminishing, increasing, or modifying substantive rights.

5. Precedent:

   • The Court cited the case of Manila Surety & Fidelity Co., Inc. vs. Villarama, which held that a creditor is not required to file a claim against the estate of a deceased solidary debtor before proceeding against the surviving debtors.

In conclusion, the Supreme Court held that the respondent court erred in dismissing the case against all defendants. The dismissal should only apply to the deceased debtor, and the case must proceed against the surviving solidary debtors.