Facts:

• Plaintiffs: Maria Pacheco Vda. de Yulo and others
• Defendants-appellants: Chua Chuco, Maximo P. Gonzales, and Luis Amador
• Case filed in the Court of First Instance of Iloilo
• Defendants raised three main issues in their appeal:
  1. Denial of their motion to revoke the decision and grant a new hearing under Rule 38
  2. Failure to declare that the defendants have already been relieved of their obligation as guarantors of the deceased Lucio Echaus
  3. Condemnation of the defendants to pay the sum of P13,500, jointly and severally, with an interest of nine percent and costs

Issue:

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Ruling:

• The decision cannot be revoked unless the appellant demonstrates good cause of action or defense
• The extension of a debtor's payment without the consent of the guarantor extinguishes the guarantee
• The defendants' obligation as guarantors has been extinguished and they should be absolved...(Unlock)

Ratio:

• It is a practice in this jurisdiction not to order the revocation of a decision unless the appellant demonstrates good cause of action or defense. This is to avoid reopening the case if the claim is unfounded or the defense is ineffective.
• While it was not strictly necessary for the court to grant the defendants a postponement of the hearing, considering that the plaintiffs were granted the same privilege without a properly filed motion, the defendants were justified in believing that their request, based on the illness of their lawyer, would be considered with the same liberality.
• The extension granted to the debtor by the creditor without the consent of the guarantor extinguishes the guarantee. There was novation of the contract, as evidenced by the fact that the original guarantee was replaced by a mortgage agreement. The defendants, who were guarantors under the...continue reading