Tan v. First Malayan Leasing and Finance Corp.

 

Tan v. First Malayan Leasing and Finance Corp.

G.R. No. 254510

June 16, 2021

 

FACTS:

New Unitedware Marketing Corporation (NUMC) obtained a loan from FMLFC amounting to P5,000,000. As security, NUMC executed a Deed of Assignment in favor of FMLFC, covering NUMC's fire insurance claim. Two "Continuing Surety Undertaking" were executed as an additional security, in favor of FMLFC, by Merrie Tan & Edward Yao (1st Suretyship), and Samson Ding and Willy Tan, Merrie's spouse (2^nd Suretyship). When NUMC defaulted on its payment of the loan, FMLFC declared that NUMC owed it the remaining balance of P2,942,822.36. When FMLFC's demands against NUMC and the other parties went unheeded, it filed a Complaint for Sum of Money against NUMC, Ding, and Spouses Tan before the RTC. During the pendency of the proceedings, Merrie discovered that Ding, in behalf of another corporation, and Yao, in behalf of NUMC, had entered into a Compromise Agreement with PCIC, where Ding and Yao were paid the amounts corresponding to payments for the fire insurance policy claim, the proceeds of which were earlier assigned by NUMC in favor of FMLFC. Premised on the said Compromise Agreement, Merrie argued that Ding and Yao should be made exclusively liable for FMLFC's claim since they were the ones who received the proceeds from the fire insurance claim.The RTC ruled in favor of FMLFC. On appeal, the CA affirmed the same. Hence, this petition.

ISSUE:

Whether or not the solidary obligation, insofar as Spouses Tan and Ding were concerned, was not novated by FMLFC's release of Yao.

HELD:

Yes, there was no novation of the solidary obligation of Spouses Tan and Ding arising from the suretyship after the release of Yao from the same. A suretyship arises upon the solidary binding of a person deemed the surety with the principal debtor for the purpose of fulfilling an obligation. The demand made against one of them shall not be an obstacle to those which may subsequently be directed against the others, so long as the debt has not been fully collected.” A "Continuing Surety Undertaking”, being a solidary obligation, allows FMLFC to seek recovery from NUMC, or from Merrie Tan or Ding. However, as spelled out in the Receipt and Release, and consistent with its right as a creditor of solidary obligors under Article 1216, FMLFC proceeded against Yao, later released him from the suretyship upon payment of P980,000.00, and expressly reserved its right to proceed against NUMC and/or its remaining co-sureties. Thus, Merrie's submissions that (i) FMLFC is estopped from treating her and the remaining co-sureties as solidary obligors since it accepted partial payment of NUMC's outstanding loan obligation from Yao; and (ii) that said acceptance and subsequent release amounted to a novation which converted the suretyship into a divisible obligation are both misplaced.