Case Summary (G.R. No. L-34959)
Factual Background
On January 7, 1966, PCIB filed a complaint in the Court of First Instance of Manila against Community Builders, Inc. and Filadelfo Rojas, who borrowed PHP 150,000. ALPHA had issued Surety Bond No. G-1689 for PHP 50,000 to ensure payment of the loan. Upon maturity, the defendants defaulted on the loan. ALPHA admitted the issuance of the bond but claimed that the debt had been settled through an assignment of receivables from the Armed Forces of the Philippines. ALPHA also raised a special defense concerning the timing and amount of the surety bond in relation to the promissory note.
Procedural History
During pre-trial proceedings, Rojas and Community Builders were declared in default for their failure to appear. The trial ultimately concluded with the CFI ruling in favor of PCIB, ordering Rojas, Community Builders, and ALPHA to pay amounts due. An appeal by Rojas and Community Builders was dismissed, while ALPHA’s appeal led the Court of Appeals to overturn the CFI's decision, leading to the current petition by PCIB.
Legal Issues
The central issue revolves around whether ALPHA's surety bond related to the promissory note. The petitioner contended that the appellate court based its ruling on factual matters not previously raised in the CFI, specifically regarding the relationship between the bond and the promissory note.
Pleading Admissions and Interpretations
PCIB noted that ALPHA admitted specific factual allegations regarding the surety bond but denied others relating to the underlying debt. PCIB argued that this admission indicated a recognition of the bond's connection to the promissory note. However, the court concluded that ALPHA's denial of knowledge regarding the debt created inconsistencies that precluded it from admitting that the bond secured Rojas's and Community Builders's obligation.
Pre-Trial Issues and Court Orders
The pre-trial order limited the issues for litigation, emphasizing that the defendants had defaulted and focusing on the credibility of the assignment of receivables. The court underscored that any defenses not resolved through admissions or agreements during the pre-trial could still be pertinent for trial.
Court of Appeals Ruling
The Court of Appeals determined that ALPHA was indeed not liable unde
...continue readingCase Syllabus (G.R. No. L-34959)
Case Background
- On January 7, 1966, Philippine Commercial and Industrial Bank (PCIB) initiated a legal complaint against Alpha Insurance and Surety Co., Inc. (ALPHA), Community Builders, Inc., and Filadelfo Rojas in the Court of First Instance (CFI) of Manila.
- The complaint asserted that Community Builders and Rojas borrowed P150,000 from PCIB, which was guaranteed by Surety Bond No. G-1689 issued by ALPHA for P50,000.
- Upon the maturity of the loan, the defendants failed to fulfill their payment obligations.
Defenses Raised by ALPHA
- In its answer, ALPHA acknowledged the issuance of Surety Bond No. G-1689, but contended that the P150,000 debt had been settled through an assignment of receivables from Rojas to PCIB.
- ALPHA also argued that the promissory note for the loan was dated September 26, 1962, which was after the issuance of the surety bond dated August 22, 1960, and that the bond was issued for an amount less than the debt.
Pre-Trial Proceedings
- During the pre-trial, both Rojas and Community Builders were absent, leading to their being declared in default.
- ALPHA reiterated its defenses, emphasizing that the surety bond was insufficient to cover the debt due to its lower amount and earlier issuance date.
Trial Court Decision
- After hearing the case, the CFI ruled in favor of PCIB, ordering Rojas, Community Builders, and ALPHA to