Case Summary (G.R. No. 151953)
Interpretation of the 1982 Undertaking
Paragraph 3 of the Undertaking obligates Sureties to:
(a) defend Obligors in any suit by PDCP;
(b) accept impleading for contribution, indemnity, or subrogation; and
(c) reimburse any Obligor “for any reason made to pay” PDCP “within seven (7) calendar days” of payment.
The “for any reason” clause plainly covers extrajudicial settlements like Ortigas’s P1.3 M compromise.
Notice and Defense Conditions
Paragraph 3(a) grants Sureties the right to timely undertake appropriate measures upon demand, not an absolute veto over Obligors’ settlements. Paragraph 3(b) anticipates Sureties’ defense costs and cross-claims. Petitioners did not dispute compliance with these conditions.
Rejection of Petitioners’ Estoppel Argument
Petitioners argued that Ortigas’s “voluntary” payment estopped reimbursement, but his compromise explicitly disclaimed liability while disposing of PDCP’s claims. The Undertaking did not bar Obligors from negotiating releases, and envisaged immediate reimbursement regardless of judicial enforcement.
Joint Versus Solidary Liability
Civil Code presumes a joint obligation in the absence of express solidarity (Arts. 1207, 1210). The Undertaking lacks any clause “to bind themselves jointly and severally.” Ortigas, as the party alleging solidarity, failed to overcome the presumption of joint liability.
Distinction from Suretyship
Although the parties are styled “Sureties,” Article 2047 defines a suretyship as an ancillary contract binding the surety solidarily with the principal debtor. The Undertaking does not identify a principal debtor or replicate all attributes of a statutory suretyship; it creates reciprocal obligations among co-obligors to reimburse, meriting treatment as joint debtors rather than as a true surety arrangement.
Attorney’s Fees Entitlement
Under Civil Code Art. 2208(2), a party may recover attorney’s fees when compelled to litigate with third persons. Petitioners’ default compelled Ortigas’s third-party proceeding, warranting the P20,000 award.
Interest Rate and Computation
Per Eastern Shipping Lines, when an obli
Case Syllabus (G.R. No. 151953)
Facts
- On April 28, 1980, PDCP entered into a US$320,000 loan agreement with Falcon Minerals, Inc. for specific purposes and subject to terms and conditions.
- On the same day, Falcon officers-stockholders Rafael Ortigas, Jr., George A. Scholey, and George T. Scholey executed an Assumption of Solidary Liability, binding themselves solidarily with Falcon for punctual loan repayment.
- Two separate guaranties for the PDCP loan were executed by other Falcon stockholders-officers acting individually: one by Salvador Escaño, the other by Mario M. Silos, Ricardo C. Silverio, Carlos L. Inductivo, and Joaquin J. Rodriguez.
- In 1982, Falcon’s control was ceded to Escaño, Silos, and Joseph M. Matti; shares were assigned by Ortigas, Inductivo, and the Scholeys as part consideration.
- An Undertaking dated June 11, 1982 was executed between “OBLIGORS” (Ortigas group) and “SURETIES” (Escaño, Silos, Matti) in which Sureties irrevocably agreed to assume and fulfill all of Obligors’ guarantees to PDCP under stipulated terms.
- Falcon drew US$178,655.59 from the credit line, secured the loan with a chattel mortgage, then defaulted; foreclosure yielded a P5,031,004.07 deficiency.
Procedural History
- April 28, 1989: PDCP filed suit (RTC Makati Civil Case No. 89-5128) against Falcon, Ortigas, Escaño, Silos, Silverio, and Inductivo.
- Ortigas answered, filed a cross-claim against Falcon, Escaño, and Silos, and indicated intent to third-party Matti and the Scholeys.
- December 1993: Escaño settled with PDCP for P1,000,000 under compromise, securing PDCP’s assignment of one-third of its claim.
- January 6, 1994: RTC approved Escaño’s compromise.
- February 24, 1994: Ortigas compromised with PDCP for P1,300,000 “full satisfaction” and release, allegedly without Sureties’ knowledge.
- 1995: Silos settled with PDCP for P500,000 in partial compromise.
- Ortigas then pursued the 1982 Undertaking by cross-claim (Escaño) and third-party complaint (Matti, Silos).
- October 5, 1995: RTC granted summary judgment in favor of Ortigas, ordering Escaño, Silos, and Matti to pay P1,300,000 plus P20,000 attorney’s fees and 12% legal interest from February 28, 1994.
- March 7, 1996: RTC denied reconsideration and maintained interest computation.
- Court of Appeals (January 23, 2002) affirmed RTC decision; petitioners Escaño and Silos filed petit