1. PNB vs Se Jr.

Noahs Ark Sugar Refinery issued on several dates, the following Warehouse Receipts (Quedans):
(a) March 1, 1989, Receipt No. 18062, covering sugar deposited by Rosa Sy; (b) March 7, 1989,
Receipt No. 18080, covering sugar deposited by RNS Merchandising (Rosa Ng Sy); (c) March 21, 1989,
Receipt No. 18081, covering sugar deposited by St. Therese Merchandising; (d)March 31, 1989,
Receipt No. 18086, covering sugar deposited by St. Therese Merchandising; and (e) April 1, 1989,
Receipt No. 18087, covering sugar deposited by RNS Merchandising. The receipts are substantially
in the form, and contains the terms, prescribed for negotiable warehouse receipts by Section 2 of the
law.
Subsequently, Warehouse Receipts Nos. 18080 and 18081 were negotiated and endorsed to Luis
T. Ramos; and Receipts Nos. 18086, 18087 and 18062 were negotiated and endorsed to Cresencia K.
Zoleta. Ramos and Zoleta then used the quedans as security for two loan agreements - one for P15.6
million and the other for P23.5 million - obtained by them from the Philippine National Bank. The
aforementioned quedans were endorsed by them to the Philippine National Bank.
Luis T. Ramos and Cresencia K. Zoleta failed to pay their loans upon maturity on January 9, 1990.
Consequently, on March 16, 1990, the Philippine National Bank wrote to Noahs Ark Sugar Refinery
demanding delivery of the sugar stocks covered by the quedans endorsed to it by Zoleta and Ramos.
Noahs Ark Sugar Refinery refused to comply with the demand alleging ownership thereof, for which
reason the Philippine National Bank filed with the Regional Trial Court of Manila a verified complaint
for Specific Performance with Damages and Application for Writ of Attachment against Noahs Ark
Sugar Refinery, Alberto T. Looyuko, Jimmy T. Go and Wilson T. Go, the last three being identified as
the sole proprietor, managing partner, and Executive Vice President of Noahs Ark, respectively.

ISSUE:

HELD: After being declared not the owner, but the warehouseman, by the Court of Appeals
on December 13, 1991 in CA-G.R. SP. No. 25938, the decision having been affirmed by us
on December 1, 1993, private respondents cannot legally be deprived of their right to enforce their
claim for warehousemans lien, for reasonable storage fees and preservation expenses. Pursuant to
Section 31 which we quote hereunder, the goods under storage may not be delivered until said lien
is satisfied.
Considering that petitioner does not deny the existence, validity and genuineness of the
Warehouse Receipts on which it anchors its claim for payment against private respondents, it cannot
disclaim liability for the payment of the storage fees stipulated therein. As contracts, the receipts
must be respected by authority of Article 1159 of the Civil Code, to wit:
In view of the foregoing, the rule may be simplified thus: While the PNB is entitled to the stocks
of sugar as the endorsee of the quedans, delivery to it shall be effected only upon payment of the
storage fees.
Imperative is the right of the warehouseman to demand payment of his lien at this juncture,
because, in accordance with Section 29 of the Warehouse Receipts Law, the warehouseman loses his
lien upon goods by surrendering possession thereof. In other words, the lien may be lost where the
warehouseman surrenders the possession of the goods without requiring payment of his lien,
because a warehousemans lien is possessory in nature.
We, therefore, uphold and sustain the validity of the assailed orders of public respondent,
dated December 20, 1994 and March 1, 1995.
 2. PNB vs Hon. Marcelino Sayo, Noahs Ark Sugar Refinery , Alberto Looyuko, Jimmy Go
and Wilson Go

Facts:
Noahs Ark issued several warehouse reciepts covering sugar deposits by Rosa Sy, RNS
Merchandising and St. Therese Merchandising. Later, 4 of these receipts were negotiated to Luis
Ramos and Cresencia Zoleta. Ramos and Zoleta later used these receipts to secure a loan with PNB.
Ramos and Zoleta failed to pay the loan, so PNB is now demanding for the delivery of the sugar
deposit covered by the warehouse receipts. Noahs Ark refused to deliver such, and claims
ownership over sugar deposits. For such reason, PNB filed a complaint for specific performance
with damages and writ of attachment against Noahs Ark.RTC Manila denied the writ of attachment.
Noahs Ark claim that in an agreement, defendants agreed to sell Rosa Sy of RNS Merchandising and
Teresita of St. Therese Merchandising the volume of sugar deposited for 63M. They also claim that
the vendees and first endorsers of the receipts did not acquire ownership, thus the subsequent
endorsers did not acquire a better right of ownership also.
Rosa Sy and Teresita Ng is saying that the transaction between them and defendants is a simulated
sale, thus they are not answerable in damages to him. PNB motion for summary judgment,
thereupon filed a Petition for Certiorari with CA.CA ordered RTC to render a summary judgment in
favor of PNB.
Trial court rendered judgment dismissing plaintiffs complaint against private respondents for lack
of cause of action and likewise dismissed private respondents counterclaim against PNB and of the
Third-Party Complaint and the Third-Party Defendants Counterclaim. On September 4, 1992, the
trial court denied PNBs Motion for Reconsideration.
On June 9, 1992, the PNB filed an appeal from the RTC decision with the Supreme Court, G.R. No.
107243, by way of a Petition for Review on Certiorari under Rule 45 of the Rules of Court.

Ruling:
SC: (a) to deliver to the petitioner Philippine National Bank, the sugar stocks covered by the
Warehouse Receipts/Quedans which are now in the latters possession as holder for value and in
due course; or alternatively, to pay (said) plaintiff actual damages in the amount of P39.1 million,
with legal interest thereon from the filing of the complaint until full payment; and
(b) to pay plaintiff Philippine National Bank attorneys fees, litigation expenses and judicial costs
hereby fixed at the amount of One Hundred Fifty Thousand Pesos (P150,000.00) as well as the
costs.
While PNB is entitled to the sugar stocks as endorsee of the receipts, delivery to it shall only be
effected upon payment of the storage fees. Because it is imperative to the right of the warehouse
man to demand payment of his lien.
6. LIM vs SECURITY BANK
Facts:
Petitioner executed a Continuing Suretyship in favor of respondent to secure "any and all types of
credit accommodation that may be granted by the bank hereinto and hereinafter" in favor of Raul
Arroyo for the amount of P2,000,000.00 which is covered by a Credit
Agreement/Promissory Note.
the Continuing Suretyship[4] executed by petitioner stipulated that:... a) "Guaranteed Obligations"
- the obligations of the Debtor arising from all credit accommodations extended by the Bank to the
Debtor, including increases, renewals, roll-overs, extensions, restructurings, amendments or
novations thereof, as well as
(i) all obligations of the Debtor presently or hereafter owing to the Bank, as appears in the accounts,
books and records of the Bank, whether direct or indirect, and (ii) any and all expenses which the
Bank may incur in enforcing any of its rights, powers and remedies under... the Credit Instruments
as defined hereinbelow.
Issues:
whether petitioner may validly be held liable for the principal debtor's loan obtained six months
after the execution of the Continuing Suretyship.
Ruling:
The terms of the Continuing Suretyship executed by petitioner, quoted earlier, are very clear. It
states that petitioner, as surety, shall, without need for any notice, demand or any other act or deed,
immediately become liable and shall pay "all credit... accommodations extended by the Bank to the
Debtor, including increases, renewals, roll-overs, extensions, restructurings, amendments or
novations thereof, as well as (i) all obligations of the Debtor presently or hereafter owing to the
Bank, as appears in the... accounts, books and records of the Bank, whether direct or indirect, and
(ii) any and all expenses which the Bank may incur in enforcing any of its rights, powers and
remedies under the Credit Instruments as defined hereinbelow.
Principles:
Such... stipulations are valid and legal and constitute the law between the parties, as Article 2053 of
the Civil Code provides that "[a] guaranty may also be given as security for future debts, the amount
of which is not yet known; x x x." Thus, petitioner is unequivocally bound by the... terms of the
Continuing Suretyship. There can be no cavil then that petitioner is liable for the principal of the
loan, together with the interest and penalties due thereon, even if said loan was obtained by the
principal debtor even after the date of execution of the
Continuing Suretyship.

7. Aglibot v. Santia (G.R. No. 185945; December 5, 2012)

CASE DIGEST: FIDELIZA J. AGLIBOT, Petitioner, v. INGERSOL L. SANTIA, Respondent.

FACTS: Engr. Ingersol L. Santia (Santia) loaned the amount of P2,500,000.00 to Pacific Lending &
Capital Corporation (PLCC), through its Manager, petitioner Fideliza J. Aglibot (Aglibot). The loan
was evidenced by a promissory note. Allegedly as a guaranty for the payment of the note, Aglibot
issued and delivered to Santia eleven (11) post-dated personal checks drawn from her own account
maintained at Metrobank. Upon presentment of the checks for payment, they were dishonored by
the bank for having been drawn against insufficient funds or closed account. Santia thus demanded
payment from PLCC and Aglibot of the face value of the checks, but neither of them heeded his
demand. Consequently, eleven (11) Informations for violation of B.P. 22 were filed before the
MTCC.

MTCC acquitted Aglibot. On appeal, the RTC rendered a decision absolving Aglibot and dismissing
the civil aspect of the case on the ground of failure to fulfill a condition precedent of exhausting all
means to collect from the principal debtor.

On appeal, the Court of Appeals ruled that the RTC erred when it dismissed the civil aspect of the
case. Hence, the CA ruled that Aglibot is personally liable for the loan.

Thus, Aglibot filed this instant petition for certiorari. She argued that she was merely a guarantor of
the obligation and therefore, entitled to the benefit of excussion under Article of the 2058 of the
Civil Code. She further posited that she is not personally liable on the checks since she merely
contracted the loan in behalf of PLCC.

ISSUES:

Is Aglibot entitled to the benefit of excussion?

Is Aglibot personally liable on the checks?
HELD: It is settled that the liability of the guarantor is only subsidiary, and all the properties of the
principal debtor, the PLCC in this case, must first be exhausted before the guarantor may be held
answerable for the debt. Thus, the creditor may hold the guarantor liable only after judgment has
been obtained against the principal debtor and the latter is unable to pay, for obviously the
exhaustion of the principals property the benefit of which the guarantor claims cannot even begin
to take place before judgment has been obtained. This rule is contained in Article 2062 of the Civil
Code, which provides that the action brought by the creditor must be filed against the principal
debtor alone, except in some instances mentioned in Article 2059 when the action may be brought
against both the guarantor and the principal debtor.

The Court must, however, reject Aglibots claim as a mere guarantor of the indebtedness of PLCC to
Santia for want of proof, in view of Article 1403(2) of the Civil Code, embodying the Statute of
Frauds. Under the above provision, concerning a guaranty agreement, which is a promise to answer
for the debt or default of another, the law clearly requires that it, or some note or memorandum
thereof, be in writing. Otherwise, it would be unenforceable unless ratified, although under Article
1358 of the Civil Code, a contract of guaranty does not have to appear in a public document.
Contracts are generally obligatory in whatever form they may have been entered into, provided all
the essential requisites for their validity are present, and the Statute of Frauds simply provides the
method by which the contracts enumerated in Article 1403(2) may be proved, but it does not
declare them invalid just because they are not reduced to writing. Thus, the form required under
the Statute is for convenience or evidentiary purposes only.
On the other hand, Article 2055 of the Civil Code also provides that a guaranty is not presumed, but
must be express, and cannot extend to more than what is stipulated therein. This is the obvious
rationale why a contract of guarantee is unenforceable unless made in writing or evidenced by
some writing.

***

The appellate court ruled that by issuing her own post-dated checks, Aglibot thereby bound herself
personally and solidarily to pay Santia, and dismissed her claim that she issued her said checks in
her official capacity as PLCCs manager merely to guarantee the investment of Santia. The facts
present a clear situation where Aglibot, as the manager of PLCC, agreed to accommodate its loan to
Santia by issuing her own post-dated checks in payment thereof. She is what the Negotiable
Instruments Law calls an accommodation party.

The relation between an accommodation party and the party accommodated is, in effect, one of
principal and surety the accommodation party being the surety. It is a settled rule that a surety is
bound equally and absolutely with the principal and is deemed an original promisor and debtor
from the beginning. The liability is immediate and direct. It is not a valid defense that the
accommodation party did not receive any valuable consideration when he executed the instrument;
nor is it correct to say that the holder for value is not a holder in due course merely because at the
time he acquired the instrument, he knew that the indorser was only an accommodation party.
Unlike in a contract of suretyship, the liability of the accommodation party remains not only
primary but also unconditional to a holder for value, such that even if the accommodated party
receives an extension of the period for payment without the consent of the accommodation party,
the latter is still liable for the whole obligation and such extension does not release him because as
far as a holder for value is concerned, he is a solidary co-debtor.

DENIED
8.