G.R. No. 245858 - Oscares vs. Magsaysay Maritime Corp.

On December 8, 2000, New Unitedware Marketing Corp. (NUMC) obtained a ₱5,000,000 loan from First Malayan Leasing & Finance Corp. (FMLFC), evidenced by a promissory note and later refinanced.
As security, NUMC assigned its PCIC fire insurance proceeds (July 2, 2001) and, on July 27, 2001, Merrie Anne L. Tan (director) and Edward Yao (president) executed a Continuing Surety Undertaking in favor of FMLFC. On November 29, 2002, Samson Ding and Willy Tan (Spouses Tan) likewise became sureties.

NUMC defaulted; FMLFC declared that as of November 17, 2004, the balance due was ₱2,942,822.36 plus penalties/interests. On January 3, 2005, FMLFC sued NUMC, Ding and Spouses Tan in Makati RTC (Civil Case No. 04-1384), and Merrie Tan filed a third-party complaint against Yao.
RTC Decision (Feb. 9, 2017): held all defendants solidarily liable for the remaining balance; imposed 12% p.a. penalty, 6% p.a. legal interest, 10% liquidated damages, 10% attorney’s fees. CA Decision (Oct. 30, 2019) affirmed with rate modifications; CA Resolution (Nov. 24, 2020) denied reconsideration.

Merrie Tan petitioned the Supreme Court under Rule 45, praying to: reverse the CA, order Yao to pay the full claim, delete penalties/attorney’s fees, and grant damages/fees against Yao for NUMC’s insurance proceeds.
She argued: (a) Yao’s release upon partial payment novated the solidary obligation into a divisible one; (b) simultaneous penalty and liquidated damages are improper; (c) dismissal of her third-party complaint was wrongful; (d) Yao is primarily liable for the PCIC proceeds.

Spouses Tan and Ding remained solidarily liable despite FMLFC’s release of Yao?
The penalty charge, liquidated damages and attorney’s fees were properly imposed and at the rates awarded?
The third-party complaint against Yao was correctly dismissed for non-payment of docket fees?