Case Digest (G.R. No. 124049)
Facts:
Velasquez v. Court of Appeals, G.R. No. 124049, June 30, 1999, Supreme Court Second Division, Bellosillo, J., writing for the Court. Petitioner Rodolfo P. Velasquez seeks reversal of the Court of Appeals’ Decision of 28 September 1995 and its Resolution of 19 February (1996 in the rollo’s first paragraph) denying reconsideration, which affirmed the Regional Trial Court (RTC) of Makati City’s 20 June 1990 summary judgment and default ruling in favor of private respondent Philippine Commercial International Bank, Inc. (PCIB).The dispute arose from a loan application by Pick-up Fresh Farms, Inc. (PUFFI) (of which Velasquez was an officer and stockholder) to PCIB under the Guarantee Fund for Small and Medium Enterprises. On 16 April 1985 PUFFI executed a loan agreement for P7,500,000.00; promissory notes (TL 121231 for P4,000,000.00 and TL 121258 for P3,500,000.00) were signed by Nebrida and Canilao as officers of PUFFI and Aircon and Refrigeration Industries, Inc. (ARII). ARII executed a chattel mortgage over equipment in favor of PCIB; Velasquez, Nebrida and Canilao executed deeds of suretyship for the loan and Dean and Raymundo executed separate suretyships.
PUFFI defaulted and PCIB foreclosed the chattel mortgage; proceeds totaled P678,000.00. PCIB then filed a complaint for sum of money with preliminary attachment to recover the remaining balance, seeking exemplary damages and attorney’s fees; a writ of preliminary attachment issued on 9 October 1989. At pre-trial on 11 April 1989 petitioner and his counsel failed to appear; the trial court declared Velasquez in default upon PCIB’s motion and granted summary judgment against him and Canilao on 20 June 1990, adjudging them solidarily liable for P7,227,624.48 plus 17% annual interest, P700,000.00 attorney’s fees and costs. The court dismissed the other defendants without prejudice for improper service.
Velasquez filed a motion for reconsideration on 31 July 1990 seeking to lift the default and set aside the judgment; the RTC denied it on 13 September 1991. The Court of Appeals (17th Division) affirmed the RTC decision in a 28 September 1995 Decision (pen. Justice Salome Montoya), and its subsequent motion for reconsideration was denied. Velasquez fil...(Subscriber-Only)
Issues:
- Procedural: Did the Court of Appeals err in affirming the RTC’s summary/default judgment and refusing to set aside the order of default entered against petitioner for counsel’s failure to appear?
- Substantive: Was the RTC/CA’s summary judgment improper because genuine issues of fact existed as to petitioner’s personal liability under the deed of suretyship?
- Substantive: Did PCIB’s acceptance of royalty payments under a franchise agreement with a third party constitute novation...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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