GR 85396; (October, 1989) (Digest)
G.R. No. 85396 October 27, 1989
RIZAL COMMERCIAL BANKING CORPORATION, petitioner, vs. COURT OF APPEALS, PHILIPPINE BLOOMING MILLS, INC. and ALFREDO CHING, respondents.
FACTS
Petitioner Rizal Commercial Banking Corporation (RCBC) filed a collection suit against Philippine Blooming Mills, Inc. (PBM) and its surety, Alfredo Ching, for obligations arising from trust receipts amounting to P7,982,649.08. The lower court granted RCBC’s motion for summary judgment, ordering PBM and Ching to pay jointly and severally. Meanwhile, PBM filed a petition for suspension of payments and rehabilitation with the Securities and Exchange Commission (SEC). The SEC issued an injunctive order suspending all actions for claims against PBM. On appeal, the Court of Appeals set aside the lower court’s decision, ruling it was improper to continue proceedings despite the SEC order, and ordered the case held in abeyance pending the SEC rehabilitation proceedings.
ISSUE
Whether an SEC Order suspending claims against a corporation undergoing rehabilitation also bars a creditor from proceeding against a solidary surety.
RULING
No. The Supreme Court reversed the Court of Appeals and reinstated the summary judgment against the surety, Alfredo Ching. The legal logic is anchored on the nature of solidary obligations and the limited scope of SEC jurisdiction. Under Articles 1207 and 1216 of the Civil Code, a solidary obligation allows a creditor to proceed against any solidary debtor. The Comprehensive Surety Agreement executed by Ching constituted a solidary undertaking, making him an original promisor. The SEC’s injunctive order, issued pursuant to its rehabilitation authority, applied only to the corporation, PBM, as the entity under its jurisdiction. The order explicitly pertained to taking custody of PBM’s assets, not the personal assets of the surety. A surety’s liability is separate and independent from the principal debtor’s; thus, suspension proceedings against the principal do not automatically benefit the surety. The Court also found no merit in the defense of customary extensions of payment, as it was unsupported by evidence, making summary judgment proper. Consequently, RCBC could enforce Ching’s liability despite the pending rehabilitation of PBM.