AUTHORSHIP INFORMATION
Digest Author Grace Ann Tamboon
Topic Suretyship Joint Obligation
CASE INFORMATION
Petitioner(s) Salvador P. Escaño And Mario M. Silos
Respondent(s) Rafael Ortigas, Jr
Reference G.R. No. 151953 June 29, 2007
Ponente TINGA, J.
DOCTRINE(S)
In the absence of an express stipulation in the agreement or clear indication from the
nature of the obligation, the presumption is that the obligation is only joint, not solidary.
The burden of proof falls on the party alleging that the obligation is solidary, and they
must provide preponderance of evidence to support their claim.
CASE SUMMARY
On April 28, 1980, Private Development Corp. of
the Philippines (PDCP) entered into a loan
agreement with the Falcon Minerals, Inc. (Falcon)
whereby PDCP agreed to male available and lend
to Falcon the amount of US $320, 000.00 for
specific purposes and subject to certain terms
Pertinent Facts
and conditions.
Three stockholder officers of the Falcon assumed
solidary liability, in their individual capacity, with
Falcon for the due and punctual payment of the
loan.
Two years later, control of Falcon was ceded to
Escaño, Silos and Matti, and the shares of
deceased Scholey, through his heirs Ortigas,
Scholey and Inductivo, were assigned to the three
new stock-holders, as well as all of their
guaranteed to PDCP and PAIC.
On April 28, 1989, PDCP filed a complaint for
sum of money with the RTC of Makati. A
counterclaim was filed by Ortigas.
The other parties entered into compromise
agreement with PDCP. Ortigas pursued his claim
against Escaño, Silos and Matti, and filing a
motion for Summary Judgement in his favor
against Escaño, Silos and Matti.
The RTC ruled in favor of Ortigas, ordering the
three to pay jointly and severally the amount of
P1,300,000.00 as well as P20,000.00 in
attorney’s fees.
On appeal, the Court of Appeals affirmed the
Summary Judgement. Hence, the present petition
for review.
PROCEDURAL HISTORY
RTC issued the Summary Judgment, ordering
RTC Escaño, Silos and Matti to pay Ortigas, jointly and
severally, the amount of ₱1,300,000.00, as well
as ₱20,000.00 in attorney’s fees.
CA Court of Appeals dismissed the appeals and
affirmed the Summary Judgment.
Relevant Issue(s) Whether or not there was solidary obligation/
Analysis The case involved a loan agreement with three
stockholder officers assuming solidary liability for
Falcon Minerals. Later, new stockholders took
control, and a complaint was filed against them.
The court ruled that the obligation was only joint,
not solidary, as there was no express stipulation
in the agreement. The Supreme Court affirmed
this ruling.
No. The obligation was joint.
In this case, there is a concurrence of two or more
creditors or of two or more debtors in one and the
Ruling(s) & Rationale same obligation. Article 1207 of the Civil Code
states that among them, there is a solidary liability
only when the obligation expressly so states, or
when the law or the nature of the obligation
requires solidarity. Article 1210 supplies further
caution against the broad interpretation of
solidarity by providing that the indivisibility of an
obligation does not necessarily give rise to
solidarity. Nor does solidarity of itself imply
indivisibility.
These Civil Code provisions establish that in case
of concurrence of two or more creditors or of two
or more debtors in one and the same obligation,
and in the absence of express and indubitable
terms characterizing the obligation as solidary,
the presumption is that the obligation is only joint.
It thus becomes incumbent upon the party
alleging that the obligation is indeed solidary in
character to prove such fact with a
preponderance of evidence.
The Undertaking does not contain any express
stipulation that the petitioners agreed to bind
themselves jointly and severally in their
obligations to the Ortigas group, or any such
terms to that effect. Hence, such obligation
established in the Undertaking is presumed only
to be joint. Ortigas, as the party alleging that the
obligation is in fact solidary, bears the burden to
overcome the presumption of jointness of
obligations. The SC ruled that he failed to
discharge such burden.
