A.M. No. P-22-053 - Santiago vs. Ferdo

Republic Glass Corporation (RGC), Gervel, Inc. and Lawrence C. Qua were stockholders of Ladtek, Inc. and became sureties for its loans from Metrobank and PDCP. They executed Contribution, Indemnity and Pledge Agreements providing that any party who pays the lenders may seek proportional reimbursement from the others and that Qua’s 1,892,360 shares of General Milling Corporation (GMC) were pledged as security.
Upon Ladtek’s default, Metrobank sued Ladtek, RGC, Gervel and Qua in Collection Case No. 8364. RGC and Gervel paid ₱7 million, induced Metrobank’s waiver and quitclaim, and saw the case dismissed against them, leaving only Ladtek and Qua.

RGC and Gervel demanded from Qua ₱3,860,646 (42.22%) as his share of the payments; he refused and they foreclosed his pledged shares. Qua filed Foreclosure Case No. 88-2643 seeking to enjoin and annul the foreclosure.
RTC-Branch 63’s 12 January 1996 Decision ordered RGC and Gervel to return the shares or pay ₱3,860,646 with interest and fees. Their motion for reconsideration led to a 3 May 1996 Order setting aside that decision and dismissing both claims.
Meanwhile, RTC-Branch 149 (later Branch 62) reinstated Collection Case No. 8364 against Qua on Metrobank’s motion and, on 21 November 1996, held Qua liable for ₱44,552,738.34 less ₱7 million, limited to ₱6.2 million and ₱1.2 million under the suretyships. Qua appealed RTC-Branch 63’s 3 May 1996 Order; the CA on 6 March 2000 reversed it and reinstated the 12 January 1996 Decision.

Does estoppel in pais or judicial admission bar Qua from disputing that RGC and Gervel paid the entire obligation?
Is full payment of the obligation a condition sine qua non for RGC and Gervel to seek reimbursement under the Indemnity Agreements?
If there were novation of the surety agreements, does it affect RGC and Gervel’s right to reimbursement and foreclosure?