This case has been cited 19 times or more.
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2015-07-08 |
SERENO, C.J. |
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| With regard to the contention that the Deed of Indemnity is a contract of adhesion, the Court has consistently held that contracts of adhesion are not invalid per se and that their binding effects have been upheld on numerous occasions.[10] The pretension that petitioners did not consent to the renewal of the bond is belied by the fact that the terms of the contract which they voluntarily entered into contained a clause granting authority to the Company to grant or consent to the renewal of the bond. Having entered into the contract with full knowledge of its terms and conditions, petitioners are estopped from asserting that they did so under the ignorance of the legal effect of the contract or the undertaking. | |||||
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2015-06-29 |
BERSAMIN, J. |
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| With the stipulations in the continuing guaranties indicating that he was the surety of the credit line extended to YLTC, Jesus was solidarity liable to Genbank for the indebtedness of YLTC. In other words, he thereby rendered himself "directly and primarily responsible" with YLTC, "without reference to the solvency of the principal."[23] | |||||
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2014-10-08 |
PERLAS-BERNABE, J. |
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| That CGAC's financial standing differs from that of NSSC does not negate the order of execution pending appeal. As the latter's surety, CGAC is considered by law as being the same party as the debtor in relation to whatever is adjudged touching the obligation of the latter, and their liabilities are interwoven as to be inseparable.[29]Verily,in a contract of suretyship, one lends his credit by joining in the principal debtor's obligation so as to render himself directly and primarily responsible with him, and without reference to the solvency of the principal.[30]Thus, execution pending appeal against NSSC means that the same course of action is warranted against its surety, CGAC. The same reason stands for CGAC's other principal, Orimaco, who was determined to have permanently left the country with his family to evade execution of any judgment against him. | |||||
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2014-08-06 |
BRION, J. |
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| In Palmares v. Court of Appeals,[60] the Court did not hesitate to rule that although a party to a promissory note was only labeled as a co-maker, his liability was that of a surety, since the instrument expressly provided for his joint and several liability with the principal. | |||||
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2014-02-04 |
PEREZ, J. |
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| The MECO[12] was organized on 16 December 1997 as a non-stock, non-profit corporation under Batas Pambansa Blg. 68 or the Corporation Code.[13] The purposes underlying the incorporation of MECO, as stated in its articles of | |||||
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2014-02-04 |
PEREZ, J. |
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| The organization of the MECO as a non-stock corporation cannot at all be denied. Records disclose that the MECO was incorporated as a non-stock corporation under the Corporation Code on 16 December 1977.[95] The incorporators of the MECO were Simeon R. | |||||
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2014-02-04 |
PEREZ, J. |
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| "fn">[111] by the government with the "delicate and precarious"[112] responsibility of pursuing "unofficial"[113] relations with the people of a foreign land whose government the Philippines is bound not to recognize. The intricacy involved in such undertaking is the possibility that, at any given time in fulfilling the purposes for which it was incorporated, the MECO may find itself engaged in dealings or activities that can directly contradict the Philippines' commitment to the One China policy of the PROC. Such a scenario can only truly be avoided if the executive department exercises some form of oversight, no matter how limited, over the operations of this otherwise private entity. Indeed, from hindsight, it is clear that the MECO is uniquely situated as compared with other private corporations. From its over-reaching corporate objectives, its special duty and authority to exercise certain consular functions, up to the oversight by the executive | |||||
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2010-08-25 |
BRION, J. |
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| We note that a card membership agreement is a contract of adhesion as its terms are prepared solely by the credit card issuer, with the cardholder merely affixing his signature signifying his adhesion to these terms.[22] This circumstance, however, does not render the agreement void; we have uniformly held that contracts of adhesion are "as binding as ordinary contracts, the reason being that the party who adheres to the contract is free to reject it entirely."[23] The only effect is that the terms of the contract are construed strictly against the party who drafted it.[24] | |||||
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2009-12-04 |
BERSAMIN, J. |
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| In Palmares v. Court of Appeals,[61] the Court found that the penalty charge of 3% per month and attorney's fees equivalent to 25% of the total amount due are highly inequitable and unreasonable, considering that from the principal loan of P30,000.00, the amount of P16,300.00 had already been paid even before the filing of the case. | |||||
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2009-06-22 |
PERALTA, J. |
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| Although this Court on various occasions has eliminated altogether the three percent (3%) penalty interest for being unconscionable,[32] We are not inclined to do the same in the present case. A reduction is more consistent with fairness and equity. We should not lose sight of the fact that Kalayaan remains an unpaid seller and that it has suffered, one way or another, from petitioners' non-performance of its contractual obligations. In view of such glaring reality, We invoke the authority granted to us by Article 1229[33] of the Civil Code, and as equity dictates, the penalty interest is accordingly reimposed at a reduced rate of one percent (1%) interest per month, or twelve percent (12%) per annum,[34] to be deducted from the partial payments made by the petitioners. | |||||
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2008-12-18 |
VELASCO JR., J. |
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| A creditor's right to proceed against the surety exists independently of his right to proceed against the principal. Under Article 1216 of the Civil Code, the creditor may proceed against any one of the solidary debtors or some or all of them simultaneously. The rule, therefore, is that if the obligation is joint and several, the creditor has the right to proceed even against the surety alone. Since, generally, it is not necessary for the creditor to proceed against a principal in order to hold the surety liable, where, by the terms of the contract, the obligation of the surety is the same as that of the principal, then soon as the principal is in default, the surety is likewise in default, and may be sued immediately and before any proceedings are had against the principal. Perforce, x x x a surety is primarily liable, and with the rule that his proper remedy is to pay the debt and pursue the principal for reimbursement, the surety cannot at law, unless permitted by statute and in the absence of any agreement limiting the application of the security, require the creditor or obligee, before proceeding against the surety, to resort to and exhaust his remedies against the principal, particularly where both principal and surety are equally bound.[12] | |||||
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2008-10-17 |
CARPIO MORALES, J. |
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| As earlier mentioned, the Court of Appeals erred in basing petitioners' liability on Promissory Note No. AGL93-0022 which was accomplished by them in support of the August 1993 application for renewal of loan but which was disapproved. Petitioners' liability should be based on Promissory Note No. AGL93-0004, which stipulates an interest of 23% per annum, and that "interest not paid when due shall be added to and constitute a part of the principal and likewise bear interest at the same rate."[28] This Court finds such interest rate unconscionable, however, and reduces it to 12% per annum.[29] The monthly penalty charge of 2% of the amount due and demandable is, likewise, under the circumstances attendant to this case, unconscionable, considering that partial payments had been made on the principal.[30] Thus, in Palmares v. Court of Appeals,[31] this Court, citing its earlier minute resolution of May 16, 1994 in G.R. No. 112614, eliminated the penalty charge altogether on the ground that:Upon the matter of penalty interest, we agree with the Court of Appeals that the economic impact of the penalty interest of three (3%) per month of the total amount due but unpaid should be equitably reduced. The purpose for which the penalty interest is intended - that is, to punish the obligor - will have been sufficiently served by the effects of compounded interest. Under the exceptional circumstances in the case at bar x x x the penalty stipulated in the parties' promissory note is iniquitious and unconscionable and may be equitably reduced further by eliminating such penalty interest altogether.[32] | |||||
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2008-07-09 |
BRION, J. |
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| In other words, the surety does not, by reason of the surety agreement, earn the right to intervene in the principal creditor-debtor relationship; its role becomes alive only upon the debtor's default, at which time it can be directly held liable by the creditor for payment as a solidary obligor. A surety contract is made principally for the benefit of the creditor-obligee and this is ensured by the solidary nature of the sureties' undertaking.[20] Under these terms, the surety is not entitled as a rule to a separate notice of default,[21] nor to the benefit of excussion,[22] and may be sued separately or together with the principal debtor.[23] The words of this Court in Palmares v. CA[24] are worth noting:Demand on the surety is not necessary before bringing the suit against them. On this point, it may be worth mentioning that a surety is not even entitled, as a matter of right, to be given notice of the principal's default. Inasmuch as the creditor owes no duty of active diligence to take care of the interest of the surety, his mere failure to voluntarily give information to the surety of the default of the principal cannot have the effect of discharging the surety. The surety is bound to take notice of the principal's default and to perform the obligation. He cannot complain that the creditor has not notified him in the absence of a special agreement to that effect in the contract of suretyship. | |||||
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2006-07-11 |
QUISUMBING, J. |
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| Section 152 of the Negotiable Instruments Law pertaining to indorsers, relied on by respondents, is not pertinent to this case. There are well-defined distinctions between the contract of an indorser and that of a guarantor/surety of a commercial paper, which is what is involved in this case. The contract of indorsement is primarily that of transfer, while the contract of guaranty is that of personal security.[14] The liability of a guarantor/surety is broader than that of an indorser. Unless the bill is promptly presented for payment at maturity and due notice of dishonor given to the indorser within a reasonable time, he will be discharged from liability thereon.[15] On the other hand, except where required by the provisions of the contract of suretyship, a demand or notice of default is not required to fix the surety's liability.[16] He cannot complain that the creditor has not notified him in the absence of a special agreement to that effect in the contract of suretyship.[17] Therefore, no protest on the export bill is necessary to charge all the respondents jointly and severally liable with G.G. Sportswear since the respondents held themselves liable upon demand in case the instrument was dishonored and on the surety, they even waived notice of dishonor as stipulated in their Letters of Guarantee. | |||||
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2006-03-31 |
CORONA, J. |
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| Moreover, under the real estate mortgage executed by them in favor of BPI-FSB, petitioners undertook to secure the P15M loan of Transbuilders to BPI-FSB "and other credit accommodations of whatever nature obtained by the Borrower/Mortgagor." While this stipulation proved to be onerous to petitioners, neither the law nor the courts will extricate a party from an unwise or undesirable contract entered into with all the required formalities and with full awareness of its consequences.[11] Petitioners voluntarily executed the real estate mortgage on their property in favor of BPI-FSB to secure the P15M loan of Transbuilders. They cannot now be allowed to repudiate their obligation to the bank after Transbuilders' default. While petitioners' liability was written in fine print and in a contract prepared by BPI-FSB, it has been the consistent holding of this Court that contracts of adhesion are not invalid per se. On numerous occasions, we have upheld the binding effects of such contracts.[12] | |||||
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2003-12-08 |
PANGANIBAN, J. |
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| Even granting arguendo that the NIL was applicable, still, petitioner would be liable for the promissory note. Under Article 29 of Act 2031, an accommodation party is liable for the instrument to a holder for value even if, at the time of its taking, the latter knew the former to be only 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.[33] It is a settled rule that a surety is bound equally and absolutely with the principal and is deemed an original promissor and debtor from the beginning. The liability is immediate and direct.[34] | |||||
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2001-12-14 |
QUISUMBING, J. |
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| We have previously held that contracts of this nature are contracts of adhesion, so-called because their terms are prepared by only one party while the other merely affixes his signature signifying his adhesion thereto.[12] As such, their terms are construed strictly against the party who drafted it.[13] In this case, it was BECC who made the foregoing stipulation, thus, they are now tasked to show vigilance for its compliance. | |||||
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2001-11-15 |
PARDO, J. |
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| It is a cardinal rule in the interpretation of contracts that if the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulation shall control.[43] Thus, as there is no ambiguity in the language of the contract, there is no room for construction, only compliance. | |||||
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2001-08-30 |
BELLOSILLO, J. |
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| Although this Court on various occasions has eliminated altogether the three percent (3%) penalty interest for being unconscionable,[14] we are not inclined to do the same in this case. A reduction is more consistent with fairness and equity. We should not lose sight of the fact that petitioner remains an unpaid seller and that it has suffered, one way or another, from respondent's non-performance of its contractual obligations. In view of such glaring reality, we invoke the authority granted to us by Art. 1229 of the Civil Code, and as equity dictates, the penalty interest is accordingly reimposed on a reduced rate of one percent (1%) interest per month or twelve percent (12%) per annum. | |||||