Case Summary (G.R. No. L-4948)
Key Dates
Loan and checks: July–November 2003
MTCC Decision: August 18, 2006
RTC Decision: April 3, 2007 (denial of civil indemnity)
CA Decision: March 18, 2008 (award of P3,000,000 plus interest)
SC Decision: December 5, 2012
Applicable Law
1987 Philippine Constitution;
Batas Pambansa Blg. 22 (Bouncing Checks Law);
Civil Code provisions on guaranty and Statute of Frauds;
Negotiable Instruments Law (Sections 29, 126, 185).
Petition for Review
Aglibot seeks annulment of the CA’s March 18, 2008 decision, which set aside the RTC’s dismissal of the civil aspect and ordered her to pay Santia P3 million with 12% annual interest from filing until finality, then compounded until full payment.
Antecedent Facts
Santia loaned PLCC P2.5 million, evidenced by a one-year, 24% promissory note signed by Aglibot on behalf of PLCC. As security, Aglibot delivered eleven post-dated personal checks from her Metrobank account. All checks were dishonored for insufficiency of funds. Santia demanded payment; PLCC and Aglibot failed to pay, prompting bouncing-check complaints.
MTCC Proceedings and Judgment
Eleven Informations for violation of B.P. 22 were filed against Aglibot. The MTCC acquitted her on reasonable doubt regarding notice of dishonor but ordered her to pay civil indemnity of P3 million plus 12% interest from November 2, 2004, attorney’s fees, and costs.
RTC Ruling on Appeal
The RTC affirmed Aglibot’s acquittal and, on the civil indemnity, reversed the MTCC’s award. It held Santia had not exhausted remedies against PLCC, the principal debtor, thus barring recovery from Aglibot as a mere guarantor.
CA Decision
The Court of Appeals reversed the RTC. It ruled that:
- Acquittal on reasonable doubt does not extinguish civil liability for indemnity.
- Aglibot’s issuance of her own checks rendered her solidarily liable to Santia.
- The benefit of excussion against a guarantor does not apply when one issues personal checks in payment.
It ordered payment of P3 million with 12% interest per annum from filing until finality, then compounded annually at 12% thereafter.
Issue on Review
Whether Aglibot, having issued her personal checks to Santia, is protected by the benefit of excussion as guarantor of PLCC’s debt, or whether she is an accommodation party personally liable under the Negotiable Instruments Law.
SC Ruling on Guaranty and Statute of Frauds
The Supreme Court held that Aglibot failed to prove a written guaranty agreement as required by Article 1403(2) of the Civil Code. No contract, memorandum, or board resolution established she guaranteed PLCC’s debt. Accordingly, she could not claim subsidiary liability or benefit of excussion
Case Syllabus (G.R. No. L-4948)
Antecedent Facts
- Engr. Ingersol L. Santia loaned ₱2,500,000 to Pacific Lending & Capital Corporation (PLCC) through its manager, Fideliza J. Aglibot, evidenced by a Promissory Note dated July 1, 2003, payable in one year at 24% interest per annum.
- As alleged security, Aglibot issued eleven post-dated personal checks drawn on her Metrobank Camiling Branch demand account.
- On presentment, all eleven checks were dishonored for “insufficient funds” or “closed account.”
- Santia demanded payment from both PLCC and Aglibot; neither complied.
- Eleven Informations under Batas Pambansa Bilang 22 were filed against Aglibot in the MTCC of Dagupan City, one for each dishonored check.
MTCC Decision
- Aglibot admitted procuring the loan on PLCC’s behalf but claimed (a) she obtained the checks as security only; (b) upon cash payment Santia agreed to return each check; (c) Santia breached that promise, deposited the checks, and they were dishonored; (d) she never received notice of dishonor; and (e) Santia’s motive was to extort higher interest.
- On August 18, 2006, the MTCC acquitted Aglibot of criminal liability for reasonable doubt regarding notice of dishonor, but ordered her to pay Santia ₱3,000,000 (face value of checks) plus 12% intere