Case Digest (G.R. No. 203133)
Facts:
On June 2, 2000, Yulim International Company Ltd. (“Yulim”), a domestic partnership, obtained a P5,000,000.00 Omnibus Loan Line from International Exchange Bank (“iBank”), evidenced by a Credit Agreement and secured by a Chattel Mortgage over Yulim’s inventory in Caloocan City. As additional security, the three partners—James Yu, Jonathan Yu, and Almerick Tieng Lim—executed a Continuing Surety Agreement, binding themselves jointly and severally with Yulim for all credit accommodations, including interest, fees, penalties, and other charges. Yulim drew several Promissory Notes totaling P4,246,310.00, consolidated under PN No. SADDK001014188 due February 28, 2002. Upon Yulim’s default, iBank sent demand letters on April 5, 2002, and filed a Complaint for Sum of Money with Replevin after repossessing warehouse goods valued at P140,000.00. The partners moved to dismiss, alleging full payment by assigning to iBank a condominium unit in Quezon City valued between P3.3 million and P5.5Case Digest (G.R. No. 203133)
Facts:
- Parties and Credit Facility
- Yulim International Company Ltd. (Yulim), a domestic partnership, obtained from International Exchange Bank (iBank) a P5,000,000 Omnibus Loan Line on June 2, 2000, secured by:
- Chattel Mortgage over Yulim’s inventory in Caloocan City warehouse
- Continuing Surety Agreement by partners James Yu, Jonathan Yu, and Almerick Tieng Lim (the petitioners)
- Yulim issued promissory notes totalling P4,246,310, later consolidated into PN No. SADDK001014188, maturing February 28, 2002.
- Default, Replevin and Collateral Assignment
- Yulim defaulted; iBank demanded payment and filed Complaint for Sum of Money with Replevin (2002).
- Sheriff’s sale yielded only P140,000 value.
- Petitioners claimed loan was extinguished by assignment of Condominium Unit No. 141, 20 Landsbergh Place, QC, valued pre–selling at P3.3M (market P5.5M).
- RTC denied petitioners’ motion to dismiss for non-compliance with Rule 15 and ultimately held Yulim liable for P4,246,310 plus 16.5% interest; dismissed personal liability of petitioners (Dec. 21, 2009).
- CA modified RTC decision (Feb. 1, 2012), ruling petitioners are jointly and severally liable with Yulim for the debt; denied petitioners’ claim of full payment by condo assignment.
Issues:
- Whether petitioners are jointly and severally liable with Yulim for the loan under the Continuing Surety Agreement.
- Whether the assignment of the condominium unit to iBank extinguished the debt (cession/payment).
- Whether iBank should be ordered to pay moral/exemplary damages and attorney’s fees to petitioners.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)