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Third Division

Sirs and Mesdames:

Quoted hereunder, for your information, is a resolution of this Court dated MAR 16 2005.

G.R. No. 136326 ( Paramount Insurance Corp. vs. Tarcisio S. Calilung and RP Technical Services, Inc., Renato Punzalan and Jose Manalo, Jr.)

Assailed in this petition for review on certiorari is the Decision ^[1] cralaw of the Court of Appeals dated August 14, 1998 and Resolution ^[2] cralaw dated November 13, 1998 in CA-G.R. CV No. 43870, entitled "Tarcisio S. Calilung versus RP Technical Services, Inc. et al."

The antecedent facts are:

Sometime in 1987, Tarcisio S. Calilung, herein respondent, informed Renato Punzalan, President of the RP Technical Services, Inc. (RPTSI), a domestic corporation, also impleaded as respondent, of his desire to buy shares of stocks worth P1,000,000.00 from RPTSI.

During the consultation meeting among the officers and stockholders of RPTSI, they did not agree with Calilung's proposal because he will be in complete control of the corporation. Instead, he was allowed to buy P2,820.00 worth of shares with the understanding that the remaining balance of P718,750.00 would be invested to finance a Shell Station Project in Batangas then being undertaken by respondent RPTSI.

On October 9, 1987, respondent Punzalan, on behalf of RPTSI, executed a promissory note in favor of Calilung in the amount of P718,750.00 with 14% interest per annum, payable on or before April 9, 1988. The payment of this promissory note was guaranteed by petitioner Paramount Insurance Corporation (Paramount) under Surety Bond No. G (16) 7003 dated October 27, 1987. On the same date, Punzalan and Jose Manalo, Jr., another officer of RPTSI, executed an indemnity agreement to the effect that Paramount would be reimbursed of all expenses it will incur under the surety bond.

However, RPTSI failed to pay Calilung the amount stated in the promissory note when it fell due, prompting him to file with the Regional Trial Court (RTC), Branch 154, Pasig City, a complaint for sum of money against RPTSI and Paramount, docketed as Civil Case No. 56194. For its part, Paramount filed a third party complaint against RPTSI and its corporate officers, Punzalan and Manalo, Jr., seeking reimbursement for all expenses it may incur under the surety bond.

In its answer, RPTSI denied that it authorized Punzalan and Manalo, Jr. to execute the promissory note and claimed that it did not benefit from the loan obtained from Calilung.

Paramount, in its answer, alleged that the terms and conditions of the surety bond have been novated when Calilung, without its consent, granted an extension to RPTSI to pay its obligation. Hence, Paramount has no obligation to pay the amount of the promissory note.

In their answer to the third party complaint, both Punzalan and Manalo, Jr. denied any liability in the indemnity agreement because they signed it as officers of the corporation, not in their personal capacities.

Paramount, RPTSI and its officers, Punzalan and Manalo, Jr., jointly challenged the validity of the promissory note on the ground that the contract is simulated. RPTSI did not intend to be bound by the promissory note. Paramount insisted that since no money was actually involved, the contract is entirely fictitious.

After trial, the RTC rendered its Decision, the dispositive portion of which reads:

"WHEREFORE, judgment is hereby rendered in favor of the plaintiff (now respondent) and against the defendants RP Technical Services, Incorporated (now respondent) and Paramount Insurance Corporation (now petitioner), jointly and severally, to pay plaintiff the following sums:

1)����� P718,750.00 with interest at 14% per annum from October 7, 1987, until fully paid;

2)����� 5% of the amount due above as attorney's fees; plus

3)����� costs.

and in favor of defendant-third party plaintiff, Paramount Insurance Corporation and against the defendant RP Technical Services, Incorporated and third party defendants, Messrs. Renato Punzalan and Jose M. Manalo, Jr. jointly and severally, to pay the former whatever sum it shall pay to the plaintiff as above ordered.

SO ORDERED."

Paramount, Punzalan and Manalo, Jr. interposed an appeal to the Court of Appeals. In its Decision dated August 14, 1998, the Appellate Court affirmed in toto the judgment of the trial court. Their motion for reconsideration was likewise denied in a Resolution dated November 13, 1998.

Hence, this petition for review on certiorari.

Paramount, herein petitioner, contends that the Court of Appeals erred in holding that the promissory note is valid. Petitioner insists that the note was simulated and that respondents committed fraud in inducing it to execute a surety bond to secure payment of the said note.

Here, the issues of whether the promissory note is simulated or not and whether its execution was attended with fraud evidently involve questions of fact and evidentiary matters which are not proper in a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended. It is basic that factual issues are beyond the province of this Court, for it is not its function to weigh the evidence all over again. Factual findings of the trial court, when adopted and affirmed by the Court of Appeals, as in this case, are binding and conclusive upon this Court and generally will not be reviewed on appeal. ^[3] cralaw There are exceptions to this general rule, but petitioner failed to show that this case is one of them.

WHEREFORE, the petition is DENIED. The assailed Decision and Resolution of the Court of Appeals in CA-G.R. CV No. 43870 are AFFIRMED. Costs against petitioner.

SO ORDERED.

Very truly yours,

(Sgd.) LUCITA ABJELINA-SORIANO
Clerk of Court