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1. She bound herself jointly and severally with xxx xxx xxx
Danilo Alto to pay SDIC all obligations and It is likewise not disputed by the parties
charges in the use of the Diners Club Card, that the credit limit granted to Celia
including fees, interest, attorney's fees, and Regala was P2,000.00 per month and
costs; that Celia Regala succeeded in using the
2. She declared that "any change or novation card beyond the original period of its
in the Agreement or any extension of time effectivity, October 29, 1979. We do not
granted by SECURITY DINERS to pay such agree, however, that Roberto Jr.'s liability
obligation, charges, and fees, shall not release should be limited to that extent. Private
(her) from this Surety Undertaking"; respondent Roberto Regala, Jr., as surety
of his wife, expressly bound himself up
3. "(S)aid undertaking is a continuous one and to the extent of the debtor's (Celia's)
shall subsist and bind (her) until all such indebtedness likewise expressly waiving
obligations, charges and fees have been fully any "discharge in case of any change or
paid and satisfied"; and novation of the terms and conditions in
4. "The indication of a credit limit to the connection with the issuance of the
cardholder shall not relieve (her) of liability for Pacificard credit card." Roberto, in fact,
charges and all other amounts voluntarily made his commitment as a surety a
incurred by the cardholder in excess of said continuing one, binding upon himself
credit limit."12 until all the liabilities of Celia Regala
have been fully paid. All these were clear
We cannot give any additional meaning to the
under the "Guarantor's Undertaking"
plain language of the subject undertaking. The
Roberto signed, thus:
extent of a surety's liability is determined by
the language of the suretyship contract or bond "x x x Any changes of or novation
itself.13 Article 1370 of the Civil Code provides: in the terms and conditions in
"If the terms of contract are clear and leave no connection with the issuance or
doubt upon the intention of the contracting use of said Pacificard, or any
parties, the literal meaning of its stipulations extension of time to pay such
shall control." obligations, charges or liabilities
shall not in any manner release
This case is no different from Pacific Banking
me/us from the responsibility
Corporation vs. IAC, supra, correctly applied by
hereunder, it being understood
the Court of Appeals, which involved a
that the undertaking is a
Guarantor's Undertaking (although thus
continuing one and shall subsist
denominated, it was in substance a contract of
and bind me/us until all the
surety signed by the husband for the credit
liabilities of the said Celia Syjuco would be well-advised to study carefully the
Regala have been fully satisfied or terms of the agreements prepared by the credit
paid." (italics supplied) card companies before giving their consent,
As a last-ditch measure, petitioner asseverates and pay heed to speculations that could lead to
that, being merely a surety, a pronouncement onerous effects, like in the present case where
should first be made declaring the principal the credit applied for was limitless. At the same
debtor liable before she herself can be time, it bears articulating that although courts
proceeded against. The argument, which is in appropriate cases may equitably reduce the
hinged upon the dropping of Danilo as award for penalty as provided under such
defendant in the complaint, is bereft of merit. suretyship agreements if the same is iniquitous
or unconscionable,16 we are unable to give
The Surety Undertaking expressly provides that relief to petitioner by way of reducing the
petitioner's liability is solidary. A surety is amount of the principal liability as surety under
considered in law as being the same party as the circumstances of this case.
the debtor in relation to whatever is adjudged
touching the obligation of the latter, and their WHEREFORE, the petition is dismissed for lack
liabilities are interwoven as to be inseparable. 14 of merit The decision of the Court of Appeals is
Although the contract of a surety is in essence AFFIRMED in all respects.
secondary only to a valid principal obligation, SO ORDERED.
his liability to the creditor is direct, primary and Melo, Panganiban and Sandoval-Gutierrez, JJ .,
absolute; he becomes liable for the debt and concur.
duty of another although he possesses no Vitug, J ., concurs in the result (pro hac vice).
direct or personal interest over the obligations
nor does he receive any benefit therefrom.15
There being no question that Danilo Alto Footnotes
incurred debts of P166,408.31 in credit card 1
Promulgated by the former
advances, an obligation shared solidarily by
Seventeenth Division; written by
petitioner, respondent was certainly within its
Associate Justice Hilarion L; Aquino, and
rights to proceed singly against petitioner, as
concurred in by Associate Justice Ramon
surety and solidary debtor, without prejudice to
U. Mabutas, Jr. (Chairman) and Associate
any action it may later file against Danilo Alto,
Justice Renato C. Dacudao.
until the obligation is fully satisfied. This is so
2
provided under Article 1216 of the Civil Code: CA Decision; Rollo, 49-52.
3
The creditor may proceed against any Answer with Compulsory Counterclaim,
one of the solidary debtors or some or all Annex "B" to Petition; Rollo, 29.
of them simultaneously. The demand 4
RTC Decision; Rollo, 44-45.
made against one of them shall not be 5
an obstacle to those which may be Ibid., 45-46.
subsequently directed against the 6
Ibid., 46.
others, so long as the debt has not been 7
Ibid., 47.
fully collected.
8
203 SCRA 496.
Petitioner is a graduate of business
9
administration, and possesses considerable CA Decision; Rollo, 58.
work experience in several banks. She knew 10
Petition; Rollo, 10.
the full import and consequence of the Surety 11
Undertaking that she executed. She had the Ibid., 14.
option to withdraw her suretyship when Danilo 12
Exh. "A-5"; Records of the Case, 93.
upgraded his card to one that permitted 13
Rizal Commercial Banking Corporation
unlimited purchases, but instead she approved
vs. Court of Appeals, 178 SCRA 739
the upgrading. While we commiserate in the
(1989); Luzon Surety Company, Inc. vs.
financial predicament she now faces, it is also
Quebrar, 127 SCRA 295 (1984).
evident that the liability she incurred is only the
14
legitimate consequence of an undertaking that Philippine National Bank vs. Pineda,
she freely and intelligently obliged to. 197 SCRA 1 (1991).
Prospective sureties to credit card applicants
15
Garcia vs. Court of Appeals, 191 SCRA
493 (1990).
16
Article 1229 of the Civil Code provides:
"The judge shall equitably reduce the
panalty when the principal obligation has
been partly or irregularly complied with
by the debtor. Even if there has been no
performance, the penalty may also be
reduced by the courts if it is iniquitous or
unconscionable." Applied in Palmares vs.
Court of Appeals, 288 SCRA 422 (1998);
Barons Marketing Corporation vs. Court
of Appeals, 286 SCRA 96 (1998); Insular
Bank of Asia & America vs. Salazar, 159
SCRA 133 (1988).