Case Summary (G.R. No. L-46095)
Background of the Case
On October 31, 1972, the Philippine National Bank filed a complaint for collection against all private respondents and Manuel H. Barredo. Manuel H. Barredo passed away before the case was decided, prompting a Motion from the respondents signaling his death to the court on June 6, 1975. The respondent court subsequently issued an Order of dismissal dated November 29, 1976, citing that the money claim against Manuel H. Barredo did not survive his death as per applicable rules.
Court's Initial Decision and Petitioner’s Motion for Reconsideration
The decision to dismiss the case against all defendants was challenged by the petitioner through a Motion for Reconsideration filed on December 14, 1976. The petitioner asserted that the court's action should have been limited to dismissing the case only against the deceased Manuel H. Barredo, allowing the case to proceed against the surviving solidary debtors. Nonetheless, this motion was denied in an order dated January 26, 1977, leading to the current petition for review on certiorari.
Legal Basis for the Petitioner's Claim
The core of the petitioner's argument centers on the interpretation of Section 6, Rule 86 of the Revised Rules of Court. The petitioner contended that this rule merely establishes a procedure should a creditor choose to seek payment from the estate of a deceased solidary debtor but does not preclude the creditor from pursuing claims against surviving debtors. This interpretation aligns with Article 1216 of the New Civil Code, which allows a creditor to proceed against any one or more solidary debtors without the necessity of involving the estate of a deceased debtor.
Supreme Court's Ruling
The Supreme Court ruled in favor of the petitioner, stating that the dismissal of the case should only apply to the deceased Manuel H. Barredo. The Court clarified that creditors have the legal option to pursue claims against the surviving solidary debtors even when one debtor has died. It emphasized that requiring a creditor to file against the deceased's estate would undermine the substantive rights granted under Artic
...continue readingCase Syllabus (G.R. No. L-46095)
Case Background
- The petitioner, Philippine National Bank (PNB), granted various credit accommodations to respondent Fabar Incorporated on January 16, 1963.
- These accommodations included a discounting line, overdraft line, temporary overdraft line, and letters of credit for the importation of machinery and equipment.
- PNB also provided advances for insurance premiums related to the mortgaged chattels securing these credit accommodations.
- As of May 13, 1977, the outstanding balance owed by Fabar Incorporated was P8,449,169.98.
- The credit accommodations were guaranteed by the joint and several signatures of private respondents, including Jose Ma. Barredo, Carmen B. Borromeo, Tomas L. Borromeo, and Manuel H. Barredo.
Legal Proceedings Initiated
- Due to the failure of the private respondents to fulfill their financial obligations, PNB filed a complaint for collection against all private respondents and Manuel H. Barredo on October 31, 1972.
- Before the resolution of the case, Manuel H. Barredo passed away on May 19, 1975, which was communicated to the court by the private respondents' counsel on June 6, 1975.
Court's Initial Decision
- The respondent Court, presided by Honorable Elias B. Asuncion, issued an Order of dismissal on November 29, 1976, based on Manuel H. Barredo's death.
- The court cited that since the case involved a money claim, it could not surviv