ChanRobles Virtual law Library

ROMEO C. GARCIA,
         Petitioner,

G.R. No. 154127
December 8, 2003

DIONISIO V. LLAMAS,
      Respondent.
 
 

PANGANIBAN, J.:chanroblesvirtuallawlibrary

Novation cannot be presumed. It must be clearly shown either by the express assent of the parties or by the complete incompatibility between the old and the new agreements. Petitioner herein fails to show either requirement convincingly; hence, the summary judgment holding him liable as a joint and solidary debtor stands.chanrobles virtuallaw libraryred

Before us is a Petition for Review[1] under Rule 45 of the Rules of Court, seeking to nullify the November 26, 2001 Decision[2] and the June 26, 2002 Resolution[3] of the Court of Appeals (CA) in CA-GR CV No. 60521. The appellate court disposed as follows:chanroblesvirtuallawlibrarychanrobles virtuallaw libraryred

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"UPON THE VIEW WE TAKE OF THIS CASE, thus, the judgment appealed from, insofar as it pertains to [Petitioner] Romeo Garcia, must be, as it hereby is, AFFIRMED, subject to the modification that the award for attorney's fees and cost of suit is DELETED. The portion of the judgment that pertains to  x  x  x  Eduardo de Jesus is SET ASIDE and VACATED. Accordingly, the case against  x  x  x Eduardo de Jesus is REMANDED to the court of origin for purposes of receiving ex parte Respondent Dionisio Llamas' evidence against  x  x  x  Eduardo de Jesus."[4]

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The challenged Resolution, on the other hand, denied petitioner's Motion for Reconsideration.

The antecedents of the case are narrated by the CA as follows:chanroblesvirtuallawlibrarychanrobles virtuallaw libraryred
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"This case started out as a complaint for sum of money and damages by .  Respondent Dionisio Llamas against .   Petitioner Romeo Garcia and Eduardo de Jesus. Docketed as Civil Case No. Q97-32-873, the complaint alleged that on 23 December 1996, petitioner and de Jesus borrowed P400,000.00 from respondent; that, on the same day, they executed a promissory note wherein they bound themselves jointly and severally to pay the loan on or before 23 January 1997 with a 5% interest per month; that the loan has long been overdue and, despite repeated demands, petitioner and de Jesus have failed and refused to pay it; and that, by reason of their unjustified refusal, respondent was compelled to engage the services of counsel to whom he agreed to pay 25% of the sum to be recovered from petitioner and de Jesus, plus P2,000.00 for every appearance in court. Annexed to the complaint were the promissory note above-mentioned and a demand letter, dated 02 May 1997, by respondent addressed to petitioner and de Jesus.chanrobles virtuallaw libraryred

"Resisting the complaint, Petitioner Garcia, in his Answer, averred that he assumed no liability under the promissory note because he signed it merely as an accommodation party for .   de Jesus; and, alternatively, that he is relieved from any liability arising from the note inasmuch as the loan had been paid by .  de Jesus by means of a check dated 17 April 1997; and that, in any event, the issuance of the check and respondent's acceptance thereof novated or superseded the note.chanrobles virtuallaw libraryred

"Respondent tendered a reply to Petitioner Garcia's answer, thereunder asserting that the loan remained unpaid for the reason that the check issued by .   de Jesus bounced, and that Petitioner Garcia's answer was not even accompanied by a certificate of non-forum shopping. Annexed to the reply were the face of the check and the reverse side thereof.chanrobles virtuallaw libraryred

"For his part, .   de Jesus asserted in his Answer with Counterclaim that out of the supposed P400,000.00 loan, he received only P360,000.00, the P40,000.00 having been advance interest thereon for two months, that is, for January and February 1997; that, in fact, he paid the sum of P120,000.00 by way of interests; that this was made when respondent's daughter, one Nits Llamas-Quijencio, received from the Central Police District Command at Bicutan, Taguig, Metro Manila (where  x  x  x  de Jesus worked), the sum of P40,000.00, representing the peso equivalent of his accumulated leave credits, another P40,000.00 as advance interest, and still another P40,000.00 as interest for the months of March and April 1997; that he had difficulty in paying the loan and had asked respondent for an extension of time; that respondent acted in bad faith in instituting the case, respondent having agreed to accept the benefits he (de Jesus) would receive for his retirement, but respondent nonetheless filed the instant case while his retirement was being processed; and that, in defense of his rights, he agreed to pay his counsel P20,000.00 as attorney's fees, plus P1,000.00 for every court appearance.chanrobles virtuallaw libraryred

"During the pre-trial conference, .   de Jesus and his lawyer did not appear, nor did they file any pre-trial brief. Neither did Petitioner Garcia file a pre-trial brief, and his counsel even manifested that he would no longer present evidence. Given this development, the trial court gave respondent permission to present his evidence ex parte against .  de Jesus; and, as regards Petitioner Garcia, the trial court directed respondent to file a motion for judgment on the pleadings, and for Petitioner Garcia to file his comment or opposition thereto.cralaw:red

"Instead, respondent filed a Motion to declare Petitioner Garcia in default and to allow him to present his evidence ex parte. Meanwhile, Petitioner Garcia filed a Manifestation submitting his defense to a judgment on the pleadings. Subsequently, respondent filed a Manifestation/Motion to submit the case for judgment on the pleadings, withdrawing in the process his previous motion. Thereunder, he asserted that petitioner's and de Jesus' solidary liability under the promissory note cannot be any clearer, and that the check issued by de Jesus did not discharge the loan since the check bounced."[5]chanrobles virtuallaw libraryred

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On July 7, 1998, the Regional Trial Court (RTC) of Quezon City (Branch 222) disposed of the case as follows:chanroblesvirtuallawlibrarychanrobles virtuallaw libraryred
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"WHEREFORE, premises considered, judgment on the pleadings is hereby rendered in favor of respondent and against petitioner and De Jesus, who are hereby ordered to pay, jointly and severally, the respondent the following sums, to wit:chanroblesvirtuallawlibrarychanrobles virtuallaw libraryred

'1) P400,000.00 representing the principal amount plus 5% interest thereon per month from January 23, 1997 until the same shall have been fully paid, less the amount of P120,000.00 representing interests already paid by  x x x  de Jesus;chanrobles virtuallaw libraryred

'2) P100,000.00 as attorney's fees plus appearance fee of P2,000.00 for each day of court appearance, and;chanrobles virtuallaw libraryred

'3) Cost of this suit.'"[6]chanrobles virtuallaw libraryred

The CA ruled that the trial court had erred when it rendered a judgment on the pleadings against De Jesus. According to the appellate court, his Answer raised genuinely contentious issues. Moreover, he was still required to present his evidence ex parte. Thus, respondent was not ipso facto entitled to the RTC judgment, even though De Jesus had been declared in default. The case against the latter was therefore remanded by the CA to the trial court for the ex parte reception of the former's evidence.chanrobles virtuallaw libraryred

As to petitioner, the CA treated his case as a summary judgment, because his Answer had failed to raise even a single genuine issue regarding any material fact.chanrobles virtuallaw libraryred
The appellate court ruled that no novation - express or implied - had taken place when respondent accepted the check from De Jesus. According to the CA, the check was issued precisely to pay for the loan that was covered by the promissory note jointly and severally undertaken by petitioner and De Jesus. Respondent's acceptance of the check did not serve to make De Jesus the sole debtor because, first, the obligation incurred by him and petitioner was joint and several; and, second, the check - which had been intended to extinguish the obligation - bounced upon its presentment.chanrobles virtuallaw libraryred

Hence, this Petition.[7]

Petitioner submits the following issues for our consideration:chanroblesvirtuallawlibrary
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"I

Whether or not the Honorable Court of Appeals gravely erred in not holding that novation applies in the instant case as  x  x  x  Eduardo de Jesus had expressly assumed sole and exclusive liability for the loan obligation he obtained from  x  x  x  Respondent Dionisio Llamas, as clearly evidenced by:chanroblesvirtuallawlibrarychanrobles virtuallaw libraryred
 

a) Issuance by  x x x  de Jesus of a check in payment of the full amount of the loan of P400,000.00 in favor of Respondent Llamas, although the check subsequently bounced;chanrobles virtuallaw libraryred

b) Acceptance of the check by the  x  x  x  respondent  x  x  x  which resulted in the substitution by  x  x  x  de Jesus or the superseding of the promissory note;chanrobles virtuallaw libraryred

c) x  x  x de Jesus having paid interests on the loan in the total amount of P120,000.00;chanrobles virtuallaw libraryred

d) The fact that Respondent Llamas agreed to the proposal of  x  x  x  de Jesus that due to financial difficulties, he be given an extension of time to pay his loan obligation and that his retirement benefits from the Philippine National Police will answer for said obligation.chan robles virtual law librarychan robles virtual law library

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"II

Whether or not the Honorable Court of Appeals seriously erred in not holding that the defense of petitioner that he was merely an accommodation party, despite the fact that the promissory note provided for a joint and solidary liability, should have been given weight and credence considering that subsequent events showed that the principal obligor was in truth and in fact  x x x  de Jesus, as evidenced by the foregoing circumstances showing his assumption of sole liability over the loan obligation.chanrobles virtuallaw libraryred

''III

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Whether or not judgment on the pleadings or summary judgment was properly availed of by Respondent Llamas, despite the fact that there are genuine issues of fact, which the Honorable Court of Appeals itself admitted in its Decision, which call for the presentation of evidence in a full-blown trial."[8]chanrobles virtuallaw libraryred

Simply put, the issues are the following: 1) whether there was novation of the obligation; 2) whether the defense that petitioner was only an accommodation party had any basis; and 3) whether the judgment against him — be it a judgment on the pleadings or a summary judgment — was proper.chanrobles virtuallaw libraryred
chanrobles virtuallaw libraryred

The Petition has no merit

First Issue:  Novation

Petitioner seeks to extricate himself from his obligation as joint and solidary debtor by insisting that novation took place, either through the substitution of De Jesus as sole debtor or the replacement of the promissory note by the check. Alternatively, the former argues that the original obligation was extinguished when the latter, who was his co-obligor, "paid" the loan with the check.chanrobles virtuallaw libraryred

The fallacy of the second (alternative) argument is all too apparent. The check could not have extinguished the obligation, because it bounced upon presentment. By law,[9] the delivery of a check produces the effect of payment only when it is encashed.chanrobles virtuallaw libraryred

We now come to the main issue of whether novation took place.cralaw:red

Novation is a mode of extinguishing an obligation by changing its objects or principal obligations, by substituting a new debtor in place of the old one, or by subrogating a third person to the rights of the creditor.[10] Article 1293 of the Civil Code defines novation as follows:chanroblesvirtuallawlibrarychanrobles virtuallaw libraryred
chanrobles virtuallaw libraryred

"Art. 1293. Novation which consists in substituting a new debtor in the place of the original one, may be made even without the knowledge or against the will of the latter, but not without the consent of the creditor. Payment by the new debtor gives him rights mentioned in articles 1236 and 1237."chanrobles virtuallaw libraryred
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In general, there are two modes of substituting the person of the debtor: (1) expromision and (2) delegacion. In expromision, the initiative for the change does not come from — and may even be made without the knowledge of — the debtor, since it consists of a third person's assumption of the obligation. As such, it logically requires the consent of the third person and the creditor. In delegacion, the debtor offers, and the creditor accepts, a third person who consents to the substitution and assumes the obligation; thus, the consent of these three persons are necessary.[11] Both modes of substitution by the debtor require the consent of the creditor.[12]chanrobles virtuallaw libraryred

Novation may also be extinctive or modificatory. It is extinctive when an old obligation is terminated by the creation of a new one that takes the place of the former. It is merely modificatory when the old obligation subsists to the extent that it remains compatible with the amendatory agreement.[13] Whether extinctive or modificatory, novation is made either by changing the object or the principal conditions, referred to as objective or real novation; or by substituting the person of the debtor or subrogating a third person to the rights of the creditor, an act known as subjective or personal novation.[14] For novation to take place, the following requisites must concur:chanroblesvirtuallawlibrarychanrobles virtuallaw libraryred

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(1) There must be a previous valid obligation.chanrobles virtuallaw libraryred
(2) The parties concerned must agree to a new contract.chanrobles virtuallaw libraryred
(3) The old contract must be extinguished.chanrobles virtuallaw libraryred
(4) There must be a valid new contract.[15]chanrobles virtuallaw libraryred

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Novation may also be express or implied. It is express when the new obligation declares in unequivocal terms that the old obligation is extinguished. It is implied when the new obligation is incompatible with the old one on every point.[16] The test of incompatibility is whether the two obligations can stand together, each one with its own independent existence.[17]chanrobles virtuallaw libraryred

Applying the foregoing to the instant case, we hold that no novation took place.chanrobles virtuallaw libraryred

The parties did not unequivocally declare that the old obligation had been extinguished by the issuance and the acceptance of the check, or that the check would take the place of the note. There is no incompatibility between the promissory note and the check. As the CA correctly observed, the check had been issued precisely to answer for the obligation. On the one hand, the note evidences the loan obligation; and on the other, the check answers for it. Verily, the two can stand together.chanrobles virtuallaw libraryred

Neither could the payment of interests — which, in petitioner's view, also constitutes novation[18] - change the terms and conditions of the obligation. Such payment was already provided for in the promissory note and, like the check, was totally in accord with the terms thereof.chanrobles virtuallaw libraryred

Also unmeritorious is petitioner's argument that the obligation was novated by the substitution of debtors. In order to change the person of the debtor, the old one must be expressly released from the obligation, and the third person or new debtor must assume the former's place in the relation.[19] Well-settled is the rule that novation is never presumed.[20] Consequently, that which arises from a purported change in the person of the debtor must be clear and express.[21] It is thus incumbent on petitioner to show clearly and unequivocally that novation has indeed taken place.chanrobles virtuallaw libraryred

In the present case, petitioner has not shown that he was expressly released from the obligation, that a third person was substituted in his place, or that the joint and solidary obligation was cancelled and substituted by the solitary undertaking of De Jesus. The CA aptly held:chanroblesvirtuallawlibrarychanrobles virtuallaw libraryred
chanrobles virtuallaw libraryred

" x  x  x  Plaintiff's acceptance of the bum check did not result in substitution by de Jesus either, the nature of the obligation being solidary due to the fact that the promissory note expressly declared that the liability of appellants thereunder is joint and solidary. Reason: under the law, a creditor may demand payment or performance from one of the solidary debtors or some or all of them simultaneously, and payment made by one of them extinguishes the obligation. It therefore follows that in case the creditor fails to collect from one of the solidary debtors, he may still proceed against the other or others  x  x  x"[22]chanrobles virtuallaw libraryred

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Moreover, it must be noted that for novation to be valid and legal, the law requires that the creditor expressly consent to the substitution of a new debtor.[23] Since novation implies a waiver of the right the creditor had before the novation, such waiver must be express.[24] It cannot be supposed, without clear proof, that the present respondent has done away with his right to exact fulfillment from either of the solidary debtors.[25]chanrobles virtuallaw libraryred

More important, De Jesus was not a third person to the obligation. From the beginning, he was a joint and solidary obligor of the P400,000 loan; thus, he can be released from it only upon its extinguishment. Respondent's acceptance of his check did not change the person of the debtor, because a joint and solidary obligor is required to pay the entirety of the obligation.chanrobles virtuallaw libraryred

It must be noted that in a solidary obligation, the creditor is entitled to demand the satisfaction of the whole obligation from any or all of the debtors.[26] It is up to the former to determine against whom to enforce collection.[27] Having made himself jointly and severally liable with De Jesus, petitioner is therefore liable[28] for the entire obligation.[29]chanrobles virtuallaw libraryred

Second Issue:  Accommodation Party

Petitioner avers that he signed the promissory note merely as an accommodation party; and that, as such, he was released as obligor when respondent agreed to extend the term of the obligation.chanrobles virtuallaw libraryred

This reasoning is misplaced, because the note herein is not a negotiable instrument. The note reads:chanroblesvirtuallawlibrarychanrobles virtuallaw libraryred
 

"PROMISSORY NOTEchanrobles virtuallaw libraryred

"P400,000.00chanrobles virtuallaw libraryred

"RECEIVED FROM ATTY. DIONISIO V. LLAMAS, the sum of FOUR HUNDRED THOUSAND PESOS, Philippine Currency payable on or before January 23, 1997 at No. 144 K-10 St. Kamias, Quezon City, with interest at the rate of 5% per month or fraction thereof.chanrobles virtuallaw libraryred

"It is understood that our liability under this loan is jointly and severally [sic].chanrobles virtuallaw libraryred

"Done at Quezon City, Metro Manila this 23rd day of December, 1996."[30]chanrobles virtuallaw libraryred

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By its terms, the note was made payable to a specific person rather than to bearer or to order[31] — a requisite for negotiability under Act 2031, the Negotiable Instruments Law (NIL). Hence, petitioner cannot avail himself of the NIL's provisions on the liabilities and defenses of an accommodation party. Besides, a non-negotiable note is merely a simple contract in writing and is evidence of such intangible rights as may have been created by the assent of the parties.[32] The promissory note is thus covered by the general provisions of the Civil Code, not by the NIL.chanrobles virtuallaw libraryred

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 promisor and debtor from the beginning. The liability is immediate and direct.[34]chanrobles virtuallaw libraryred

Third Issue:  Propriety of Summary Judgment or Judgment on the Pleadings

The next issue illustrates the usual confusion between a judgment on the pleadings and a summary judgment. Under Section 3 of Rule 35 of the Rules of Court, a summary judgment may be rendered after a summary hearing if the pleadings, supporting affidavits, depositions and admissions on file show that (1) except as to the amount of damages, there is no genuine issue regarding any material fact; and (2) the moving party is entitled to a judgment as a matter of law.
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A summary judgment is a procedural device designed for the prompt disposition of actions in which the pleadings raise only a legal, not a genuine, issue regarding any material fact.[35] Consequently, facts are asserted in the complaint regarding which there is yet no admission, disavowal or qualification; or specific denials or affirmative defenses are set forth in the answer, but the issues are fictitious as shown by the pleadings, depositions or admissions.[36] A summary judgment may be applied for by either a claimant or a defending party.[37]chanrobles virtuallaw libraryred

On the other hand, under Section 1 of Rule 34 of the Rules of Court, a judgment on the pleadings is proper when an answer fails to render an issue or otherwise admits the material allegations of the adverse party's pleading. The essential question is whether there are issues generated by the pleadings.[38] A judgment on the pleadings may be sought only by a claimant, who is the party seeking to recover upon a claim, counterclaim or cross-claim; or to obtain a declaratory relief.[39]chanrobles virtuallaw libraryred

Apropos thereto, it must be stressed that the trial court's judgment against petitioner was correctly treated by the appellate court as a summary judgment, rather than as a judgment on the pleadings. His Answer[40] apparently raised several issues - that he signed the promissory note allegedly as a mere accommodation party, and that the obligation was extinguished by either payment or novation. However, these are not factual issues requiring trial. We quote with approval the CA's observations:chanroblesvirtuallawlibrarychanrobles virtuallaw libraryred
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"Although Garcia's Answer tendered some issues, by way of affirmative defenses, the documents submitted by respondent nevertheless clearly showed that the issues so tendered were not valid issues. Firstly, Garcia's claim that he was merely an accommodation party is belied by the promissory note that he signed. Nothing in the note indicates that he was only an accommodation party as he claimed to be. Quite the contrary, the promissory note bears the statement: 'It is understood that our liability under this loan is jointly and severally [sic].' Secondly, his claim that his co-defendant de Jesus already paid the loan by means of a check collapses in view of the dishonor thereof as shown at the dorsal side of said check."[41]chanrobles virtuallaw libraryred
chanrobles virtuallaw libraryred

From the records, it also appears that petitioner himself moved to submit the case for judgment on the basis of the pleadings and documents. In a written Manifestation,[42] he stated that "judgment on the pleadings may now be rendered without further evidence, considering the allegations and admissions of the parties."[43]chanrobles virtuallaw libraryred

In view of the foregoing, the CA correctly considered as a summary judgment that which the trial court had issued against petitioner.chanrobles virtuallaw libraryred

WHEREFORE, this Petition is hereby DENIED and the assailed Decision AFFIRMED. Costs against petitioner.chanrobles virtuallaw libraryred

SO ORDERED.chanrobles virtuallaw libraryred

Davide, Jr., C.J., Ynares-Santiago, Carpio and Azcuna, JJ., concur.chanrobles virtuallaw libraryred
 
 

____________________________

Endnotes:chanroblesvirtuallawlibrary
 

[1] Rollo, pp. 11–39.chanrobles virtuallaw libraryred
[2] Id., pp. 41–46. Tenth Division. Penned by Justice Renato C. Dacudao, with the concurrence of Justices Ruben T. Reyes (Division chairman) and Mariano C. del Castillo (member).
[3] Rollo, pp. 48–49.chanrobles virtuallaw libraryred
[4] CA Decision, p. 6; rollo, p. 46.chanrobles virtuallaw libraryred
[5] Id., pp. 2–3 & 42–43.chanrobles virtuallaw libraryred
[6] RTC Decision, p. 4; rollo, p. 68. Penned by Judge Eudarlio B. Valencia.chanrobles virtuallaw libraryred
[7] Only Petitioner Garcia appealed the CA Decision. His Petition was deemed submitted for decision on January 30, 2003, upon the Court's receipt of respondent's Memorandum signed by Atty. Felipe N. Egargo Jr. Petitioner's Memorandum, which was signed by Atty. Carlos G. Nery Jr., was received by the Court on January 16, 2003.chanrobles virtuallaw libraryred
[8] Petitioner's Memorandum, pp. 10–11; rollo, pp. 97–98. Original in upper case.chanrobles virtuallaw libraryred
[9] Article 1249 of the Civil Code provides in part:chanroblesvirtuallawlibrarychanrobles virtuallaw libraryred
"The delivery of promissory notes payable to order, or bills of exchange or other mercantile documents shall produce the effect of payment only when they have been cashed, or when through the fault of the creditor they have been impaired.chanrobles virtuallaw libraryred
"  x  x  x            x  x  x            x  x  x" chanrobles virtuallaw libraryred
[10] Idolor v. CA, 351 SCRA 399, 407, February 7, 2001; Agro Conglomerates, Inc. v. CA, 348 SCRA 450, 458, December 12, 2000; De Cortes v. Venturanza, 79 SCRA 709, 722–723, October 28, 1977; PNB v. Mallari and The First Nat'l. Surety & Assurance Co., Inc., 104 Phil. 437, 441, August 29, 1958.chanrobles virtuallaw libraryred
[11] Tolentino, Civil Code of the Philippines, Vol. IV (1991 ed.), p. 390; De Cortes v. Venturanza, supra, p. 723.chanrobles virtuallaw libraryred
[12] Garcia v. Khu Yek Chiong, 65 Phil. 466, 468, March 31, 1938; De Cortes v. Venturanza, supra, p. 723.chanrobles virtuallaw libraryred
[13] Babst v. CA, 350 SCRA 341, January 26, 2001.chanrobles virtuallaw libraryred
[14] Spouses Bautista v. Pilar Development Corporation, 371 Phil. 533, August 17, 1999.chanrobles virtuallaw libraryred
[15] Agro Conglomerates, Inc. v. CA, supra, pp. 458–459; Security Bank and Trust Company, Inc. v. Cuenca, 341 SCRA 781, 796, October 3, 2000; Reyes v. CA., 332 Phil. 40, 50, November 4, 1996.
[16] Spouses Bautista v. Pilar Development Corporation, supra. See also Article 1292 of the Civil Code.chanrobles virtuallaw libraryred
[17] Molino v. Security Diners International Corporation, 415 Phil. 587, August 16, 2001.chanrobles virtuallaw libraryred
[18] Petitioner's Memorandum, p. 17; rollo, p. 104.chanrobles virtuallaw libraryred
[19] Reyes v. CA, supra; citing Ajax Marketing and Development Corporation v. CA., 248 SCRA 222, September 14, 1995.chanrobles virtuallaw libraryred
[20] Ibid.; Agro Conglomerates, Inc. v. CA, supra; Security Bank and Trust Company, Inc. v. Cuenca, supra.chanrobles virtuallaw libraryred
[21] Ibid.chanrobles virtuallaw libraryred
[22] CA Decision, p. 5; rollo, p. 45.chanrobles virtuallaw libraryred
[23] Article 1293 of the Civil Code.chanrobles virtuallaw libraryred
[24] Babst v. CA; supra; citing Testate Estate of Mota v. Serra, 47 Phil. 464, February 14, 1925.chanrobles virtuallaw libraryred
[25] Article 1216 of the Civil Code provides:chanroblesvirtuallawlibrarychanrobles virtuallaw libraryred
"Art. 1216. The creditor may proceed against any one of the solidary debtors or some or all of them simultaneously. 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."chanrobles virtuallaw libraryred
[26] PH Credit Corporation v. CA, 370 SCRA 155, November 22, 2001; Industrial Management International Development Corp. v. National Labor Relations Commission, 387 Phil. 659, May 11, 2000; Inciong Jr. v. CA, 327 Phil. 364, June 26, 1996. See also Article 1216 of the Civil Code.chanrobles virtuallaw libraryred
[27] Inciong v. CA, 327 Phil. 364, June 26, 1996.chanrobles virtuallaw libraryred
[28] Ibid.; PH Credit Corporation v. CA, supra; Industrial Management International Development Corp. v. National Labor Relations Commission, supra.chanrobles virtuallaw libraryred
[29] See Articles 1217 and 1218 of the Civil Code.chanrobles virtuallaw libraryred
[30] Records, p. 7.chanrobles virtuallaw libraryred
[31] Section 1 of the Negotiable Instruments Law provides the requisites for the negotiability of an instrument, as follows:chanroblesvirtuallawlibrarychanrobles virtuallaw libraryred
"Section 1. Form of negotiable instruments. An instrument to be negotiable must conform to the following requirements:chanroblesvirtuallawlibrarychanrobles virtuallaw libraryred
It must be in writing and signed by the maker or drawer;chanrobles virtuallaw libraryred
Must contain an unconditional promise or order to pay a sum certain in money;chanrobles virtuallaw libraryred
Must be payable on demand, or at a fixed or determinable future time;chanrobles virtuallaw libraryred
Must be payable to order or to bearer; andchanrobles virtuallaw libraryred
Where the instrument is addressed to a drawee, he must be named or otherwise indicated therein with reasonable certainty."chanrobles virtuallaw libraryred
[32] Agbayani, Commentaries and Jurisprudence on the Commercial Laws of the Philippines, Vol. 1 (1992 ed.), p. 100.chanrobles virtuallaw libraryred
[33] Spouses Gardose v. Tarroza, 352 Phil. 797, May 19, 1998, citing Caneda Jr. v. CA, 181 SCRA 762, February 5, 1990; Prudencio v. CA, 227 Phil. 7, July 14, 1986.chanrobles virtuallaw libraryred
[34] Palmares v. CA, 351 Phil. 664, March 31, 1998.chanrobles virtuallaw libraryred
[35] Puyat v. Zabarte, 352 SCRA 738, February 26, 2001.chanrobles virtuallaw libraryred
[36] Narra Integrated Corporation v. CA, 344 SCRA 781, November 15, 2000.chanrobles virtuallaw libraryred
[37] See §§1 and 2 of Rule 35 of the Rules of Court.chanrobles virtuallaw libraryred
[38] Diman v. Alumbres, 359 Phil. 796, November 27, 1998.chanrobles virtuallaw libraryred
[39] Ibid.chanrobles virtuallaw libraryred
[40] Dated February 2, 1998; records, pp. 21–22.chanrobles virtuallaw libraryred
[41] CA Decision, p. 5; rollo, p. 45.chanrobles virtuallaw libraryred
[42] Dated May 12, 1998; records, pp. 44–45.chanrobles virtuallaw libraryred
[43] Petitioner's Manifestation dated May 12, 1998, p. 1; id., p. 44.chanrobles virtuallaw libraryred
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