G.R. No. 47495 - Texas Co. vs. Alonso

The petitioner is The Texas Company (Phil.), Inc., a corporation seeking payment.
The respondents are Leonor S. Bantug, the agent who entered into an agency contract with the petitioner, and Tomas Alonso, who executed a bond as guarantor for the agent’s faithful performance.

On August 12, 1929, Leonor S. Bantug and Tomas Alonso became parties to an agency contract (designated as Exhibit A) in which Bantug was appointed as the agent to sell the company’s petroleum products.
As part of the contract, a guaranty clause was incorporated requiring the agent to furnish additional security when requested by the company.
Tomas Alonso signed the bond stating:

“For value received, we jointly and severally do hereby bind ourselves and each of us, in solidum, with Leonor S. Bantug … for full and complete performance”
The bond specifically limited his liability not to exceed P2,000.

The bond, executed in the same document as the agency contract, was understood to serve as collateral to ensure adequate performance under the contract.

Leonor S. Bantug was sued by the Texas Company on November 5, 1935 to recover an unpaid balance of P629 arising from the agency account.
Bantug was declared in default for non-appearance, while Tomas Alonso filed an answer denying liability by claiming:

The Court of First Instance of Cebu rendered judgment on July 10, 1937 (later amended on February 1, 1938) holding both Bantug and Alonso jointly and severally liable for the amount of P629 with interest and proportional costs.
Upon appeal, the Court of Appeals modified the judgment by absolving Tomas Alonso and holding only Bantug liable.

The petitioner contended that the Court of Appeals erred by reducing Tomas Alonso’s liability since the bond was treated merely as an offer of guaranty.
The petitioner argued that acceptance of the guaranty is not required in this context, citing jurisprudence that acceptance may be implied, or that the guaranty is binding once executed as an unconditional promise.
The Court of Appeals, relying partly on National Bank vs. Garcia and the decision in National Bank vs. Escueta, held that Tomas Alonso’s guaranty was subject to acceptance and that, due to the absence of any evidence of notice of acceptance, he was not bound.

The agency contract contained a clause labeled “Additional Security” requiring the agent, whenever requested by the company, to furnish further guaranty or bond.
The logical implication of this clause was that any guaranty beyond the original one must be accepted (approved) by the company before becoming binding.
The Court of Appeals based its decision on the finding that no evidence existed to show that Tomas Alonso had knowledge of any acceptance or approval by the petitioner of his bond.
A dissenting opinion argued that certain factual conclusions by the Court of Appeals were merely inferences, cautioning against disregarding erroneous conclusions drawn from the factual matrix.

Whether the bond executed by Tomas Alonso constituted an unconditional and original guaranty, or was merely an offer/proposition for a guaranty subject to the petitioner's acceptance.

Whether the absence of any notification or express acceptance of the bond by the Texas Company effectively precluded the guarantor from liability.

Whether the clause should be construed as requiring an additional bond only when the company deems it satisfactory, thereby rendering the guaranty executed on August 12, 1929 as preliminary or merely an offer pending acceptance.

Whether the fact that there was no evidence indicating Tomas Alonso ever received notice of the petitioner’s acceptance (implied or express) of the guaranty affects his obligation under the bond.