Inciong, Jr. vs. Court of Appeals

Co-maker (D) vs. Creditor (P)
GR 96405	[T]

Summary: A co-maker to a loan is facing collection demands from a creditor bank. One of his co-defendant is outside the Philippine jurisdiction while the creditor chose to dismiss their claim against the other.

Rule of Law: In solidary obligations, any one, some or all of the debtors may be proceeded against for the entire obligation. The choice is left to the solidary creditor to determine against whom he will enforce collection.

Facts: Baldomero Inciong, Jr. (D) cosigned a P50,000-promissory note with Rene Naybe and Gregorio Pantanosas holding themselves jointly and severally liable to creditor Philippine Bank of Communications (P)—PBCOM, Cagayan de Oro City branch.

The due date expired without the promissors paying their obligation. Consequently, creditor PBCOM (P) demanded payment from the obligors who did not respond. So, creditor PBCOM (P) filed for collection of the sum of P50,000.00 against the three obligors.

The complaint was dismissed for failure of the plaintiff to prosecute the case, but the lower court reconsidered and the summonses were eventually served. As prayed for by PBCOM (P), the lower court dismissed the case against defendant Pantanosas. With co-defendant Naybe in Saudi Arabia, only the summons to co-maker Inciong (D) was duly served.

Inciong (D) contended that he only agreed to limit his liability to P5,000 and that his consent was vitiated by fraud. On appeal, he annexed to his petition an affidavit supporting his claim of fraud.

Issues: Can the creditor file a claim for the entire obligation against a co-maker to a loan?

Ruling: Yes. Because the promissory note involved in this case expressly states that the three signatories therein are jointly and severally liable, any one, some or all of them may be proceeded against for the entire obligation. The choice is left to the solidary creditor to determine against whom he will enforce collection.

Consequently, the dismissal of the case against co-defendant Pantanosas may not be deemed as having discharged petitioner from liability. As regards co-defendant Naybe, suffice it to say that the court never acquired jurisdiction over him. Therefore, PBCOM (P) only have recourse against his co-makers, as provided by law.

Inciong (D) signed the promissory note as a solidary co-maker and not as a guarantor.

A solidary or joint and several obligation is one in which each debtor is liable for the entire obligation, and each creditor is entitled to demand the whole obligation.
   —Tolention, Civil Code of the Philippines, Vol. IV, 1991, p. 217.

On the other hand, Article 2047 of the Civil Code states:

By guaranty a person, called the guarantor, binds himself to the creditor to fulfill the obligation of the principal debtor in case the latter should fail to do so.

If a person binds himself solidarily with the principal debtor, the provisions of Section 4, Chapter 3, Title I of this Book shall be observed. In such a case the contract is called a suretyship.

Section 4, Chapter 3, Title I, Book IV of the Civil Code states the law on joint and several obligations.

When there are two or more debtors in one and the same obligation, the presumption is that the obligation is joint so that each of the debtors is liable only for a proportionate part of the debt. There is a solidary liability only when the obligation expressly so states, when the law so provides or when the nature of the obligation so requires.
   —Article 1207 of the New Civil Code

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* Keywords: solidary obligation, co-maker