G.R. No. 160466 January 17, 2005SPOUSES ALFREDO and SUSANA ONG,petitioners,vs.PHILIPPINE COMMERCIAL INTERNATIONAL BANK,respondent.D E C I S I O NPUNO,J.:This is a petition for review oncertiorariunder Rule 45 of the Rules of Court to set aside the Decision of the Court of Appeals in CA-G.R. SP No. 39255, dated February 17, 2003, affirming the decision of the trial court denying petitioners motion to dismiss.The facts: Baliwag Mahogany Corporation (BMC) is a domestic corporation engaged in the manufacture and export of finished wood products. Petitioners-spouses Alfredo and Susana Ong are its President and Treasurer, respectively.On April 20, 1992, respondent Philippine Commercial International Bank (now Equitable-Philippine Commercial International Bank or E-PCIB) filed a case for collection of a sum of money1against petitioners-spouses. Respondent bank sought to hold petitioners-spouses liable as sureties on the three (3) promissory notes they issued to secure some of BMCs loans, totalling five million pesos (P5,000,000.00).The complaint alleged that in 1991, BMC needed additional capital for its business and applied for various loans, amounting to a total of five million pesos, with the respondent bank. Petitioners-spouses acted as sureties for these loans and issued three (3) promissory notes for the purpose. Under the terms of the notes, it was stipulated that respondent bank may consider debtor BMC in default and demand payment of the remaining balance of the loan upon the levy, attachment or garnishment of any of its properties, or upon BMCs insolvency, or if it is declared to be in a state of suspension of payments. Respondent bank granted BMCs loan applications.On November 22, 1991, BMC filed a petition for rehabilitation and suspension of payments with the Securities and Exchange Commission (SEC) after its properties were attached by creditors. Respondent bank considered debtor BMC in default of its obligations and sought to collect payment thereof from petitioners-spouses as sureties. In due time, petitioners-spouses filed their Answer.1awphi1.ntOn October 13, 1992, a Memorandum of Agreement (MOA)2was executed by debtor BMC, the petitioners-spouses as President and Treasurer of BMC, and the consortium of creditor banks of BMC (of which respondent bank is included). The MOA took effect upon its approval by the SEC on November 27, 1992.3Thereafter,petitioners-spouses moved to dismiss4the complaint. They argued that as the SEC declared the principal debtor BMC in a state of suspension of payments and, under the MOA, the creditor banks, including respondent bank, agreed to temporarily suspend any pending civil action against the debtor BMC, the benefits of the MOA should be extended to petitioners-spouses who acted as BMCs sureties in their contracts of loan with respondent bank. Petitioners-spouses averred that respondent bank is barred from pursuing its collection case filed against them.The trial court denied the motion to dismiss. Petitioners-spouses appealed to the Court of Appeals which affirmed the trial courts ruling that a creditor can proceed against petitioners-spouses as surety independently of its right to proceed against the principal debtor BMC.Hence this appeal.Petitioners-spouses claim that the collection case filed against them by respondent bank should be dismissed for three (3) reasons: First, the MOA provided that during its effectivity, there shall be a suspension of filing or pursuing of collection cases against the BMC and this provision should benefit petitioners as sureties. Second, principal debtor BMC has been placed under suspension of payment of debts by the SEC; petitioners contend that it would prejudice them if the principal debtor BMC would enjoy the suspension of payment of its debts while petitioners, who acted only as sureties for some of BMCs debts, would be compelled to make the payment; petitioners add that compelling them to pay is contrary toArticle 2063of the Civil Code which provides that a compromise between the creditor and principal debtor benefits theguarantorand should not prejudice the latter. Lastly, petitioners rely onArticle 2081of the Civil Code which provides that: "theguarantormay set up against the creditor all the defenses which pertain to the principal debtor and are inherent in the debt; but not those which are purely personal to the debtor." Petitioners aver that if the principal debtor BMC can set up the defense of suspension of payment of debts and filing of collection suits against respondent bank, petitioners as sureties should likewise be allowed to avail of these defenses.We find no merit in petitioners contentions.Reliance of petitioners-spouses on Articles 2063 and 2081 of the Civil Code is misplaced as these provisions refer to contracts of guaranty. They do not apply to suretyship contracts. Petitioners-spouses are not guarantors but sureties of BMCs debts. There is a sea of difference in the rights and liabilities of a guarantor and a surety. Aguarantor insures the solvency of the debtor while a surety is an insurer of the debt itself. A contract of guaranty gives rise to asubsidiary obligation on the part of the guarantor. It is only after the creditor has proceeded against the properties of the principal debtor and the debt remains unsatisfied that a guarantor can be held liable to answer for any unpaid amount. This is the principle of excussion. In a suretyship contract, however,the benefit of excussion is not available to the surety as he is principally liable for the payment of the debt. As the surety insures the debt itself, he obligates himself to pay the debt if the principal debtor will not pay, regardless of whether or not the latter is financially capable to fulfill his obligation. Thus, a creditor can go directly against the surety although the principal debtor is solvent and is able to pay or no prior demand is made on the principal debtor.A surety is directly, equally and absolutely bound with the principal debtor for the payment of the debt and is deemed as an original promissor and debtor from the beginning.5Under the suretyship contract entered into by petitioners-spouses with respondent bank, the former obligated themselves to be solidarily bound with the principal debtor BMC for the payment of its debts to respondent bank amounting to five million pesos (P5,000,000.00). UnderArticle 1216 of the Civil Code,6respondent bank as creditor may proceed against petitioners-spouses as sureties despite the execution of the MOA which provided for the suspension of payment and filing of collection suits against BMC. Respondent banks right to collect payment from the surety exists independently of its right to proceed directly against the principal debtor. In fact, the creditor bank may go against the surety alone without prior demand for payment on the principal debtor.7The provisions of the MOA regarding the suspension of payments by BMC and the non-filing of collection suits by the creditor banks pertain only to the property of the principal debtor BMC. Firstly, in the rehabilitation receivership filed by BMC, only the properties of BMC were mentioned in the petition with the SEC.8Secondly, there is nothing in the MOA that involves the liabilities of the sureties whose properties are separate and distinct from that of the debtor BMC. Lastly, it bears to stress that the MOA executed by BMC and signed by the creditor-banks was approved by the SEC whose jurisdiction is limited only to corporations and corporate assets. It has no jurisdiction over the properties of BMCs officers or sureties.1awphi1.ntClearly, the collection suit filed by respondent bank against petitioners-spouses as sureties can prosper. The trial courts denial of petitioners motion to dismiss was proper.IN VIEW WHEREOF, the petition is DISMISSED for lack of merit. No pronouncement as to costs.SO ORDERED.

G.R. No. 113931 May 6, 1998E. ZOBEL, INC.,petitioner,vs.THE COURT OF APPEALS, CONSOLIDATED BANK AND TRUST CORPORATION, and SPOUSES RAUL and ELEA R. CLAVERIA,respondents.MARTINEZ,J.:This petition for review oncertiorariseeks the reversal of the decision1of the Court of Appeals dated July 13, 1993 which affirmed the Order of the Regional Trial Court of Manila, Branch 51, denying petitioner's Motion to Dismiss the complaint, as well as the Resolution2dated February 15, 1994 denying the motion for reconsideration thereto.The facts are as follows:Respondent spouses Raul and Elea Claveria, doing business under the name "Agro Brokers," applied for a loan with respondent Consolidated Bank and Trust Corporation (now SOLIDBANK) in the amount of Two Million Eight Hundred Seventy Five Thousand Pesos (P2,875,000.00) to finance the purchase of two (2) maritime barges and one tugboat3which would be used in their molasses business. The loan was granted subject to the condition that respondent spouses execute a chattel mortgage over the three (3) vessels to be acquired and that a continuing guarantee be executed by Ayala International Philippines, Inc., now herein petitioner E. Zobel, Inc., in favor of SOLIDBANK. The respondent spouses agreed to the arrangement. Consequently, a chattel mortgage and a Continuing Guaranty4were executed.Respondent spouses defaulted in the payment of the entire obligation upon maturity. Hence, on January 31, 1991, SOLIDBANK filed a complaint for sum of money with a prayer for a writ of preliminary attachment, against respondents spouses and petitioner. The case was docketed as Civil Case No. 91-55909 in the Regional Trial Court of Manila.Petitioner moved to dismiss the complaint on the ground that its liability as guarantor of the loan was extinguished pursuant to Article 2080 of the Civil Code of the Philippines. It argued that it has lost its right to be subrogated to the first chattel mortgage in view of SOLIDBANK's failure to register the chattel mortgage with the appropriate government agency.SOLIDBANK opposed the motion contending that Article 2080 is not applicable because petitioner is not a guarantor but a surety.On February 18, 1993, the trial court issued an Order, portions of which reads:After a careful consideration of the matter on hand, the Court finds the ground of the motion to dismiss without merit. The document referred to as "Continuing Guaranty" dated August 21, 1985 (Exh. 7) states as follows:For and in consideration of any existing indebtedness to you of Agro Brokers, a single proprietorship owned by Mr. Raul Claveria for the payment of which the undersigned is now obligated to you as surety and in order to induce you, in your discretion, at any other manner, to, or at the request or for the account of the borrower, . . .The provisions of the document are clear, plain and explicit.Clearly therefore, defendant E. Zobel, Inc. signed as surety. Even though the title of the document is "Continuing Guaranty", the Court's interpretation is not limited to the title alone but to the contents and intention of the parties more specifically if the language is clear and positive. The obligation of the defendant Zobel being that of a surety, Art. 2080 New Civil Code will not apply as it is only for those acting as guarantor. In fact, in the letter of January 31, 1986 of the defendants (spouses and Zobel) to the plaintiff it is requesting that the chattel mortgage on the vessels and tugboat be waived and/or rescinded by the bank inasmuch as the said loan is covered by the Continuing Guaranty by Zobel in favor of the plaintiff thus thwarting the claim of the defendant now that the chattel mortgage is an essential condition of the guaranty. In its letter, it said that because of the Continuing Guaranty in favor of the plaintiff the chattel mortgage is rendered unnecessary and redundant.With regard to the claim that the failure of the plaintiff to register the chattel mortgage with the proper government agency,i.e. with the Office of the Collector of Customs or with the Register of Deeds makes the obligation a guaranty, the same merits a scant consideration and could not be taken by this Court as the basis of the extinguishment of the obligation of the defendant corporation to the plaintiff as surety. The chattel mortgage is an additional security and should not be considered as payment of the debt in case of failure of payment. The same is true with the failure to register, extinction of the liability would not lie.WHEREFORE, the Motion to Dismiss is hereby denied and defendant E. Zobel, Inc., is ordered to file its answer to the complaint within ten (10) days from receipt of a copy of this Order.5Petitioner moved for reconsideration but was denied on April 26, 1993.6Thereafter, petitioner questioned said Orders before the respondent Court of Appeals, through a petition forcertiorari, alleging that the trial court committed grave abuse of discretion in denying the motion to dismiss.On July 13, 1993, the Court of Appeals rendered the assailed decision the dispositive portion of which reads:WHEREFORE, finding that respondent Judge has not committed any grave abuse of discretion in issuing the herein assailed orders, We hereby DISMISS the petition.A motion for reconsideration filed by petitioner was denied for lack of merit on February 15, 1994.Petitioner now comes to usviathis petition arguing that the respondent Court of Appeals erred in its finding: (1) that Article 2080 of the New Civil Code which provides: "The guarantors, even though they be solidary, are released from their obligation whenever by some act of the creditor they cannot be subrogated to the rights, mortgages, and preferences of the latter," is not applicable to petitioner; (2) that petitioner's obligation to respondent SOLIDBANK under the continuing guaranty is that of a surety; and (3) that the failure of respondent SOLIDBANK to register the chattel mortgage did not extinguish petitioner's liability to respondent SOLIDBANK.We shall first resolve the issue of whether or not petitioner under the "Continuing Guaranty" obligated itself to SOLIDBANK as a guarantor or a surety.A contract of surety is an accessory promise by which a person binds himself for another already bound, and agrees with the creditor to satisfy the obligation if the debtor does not.7A contract of guaranty, on the other hand, is a collateral undertaking to pay the debt of another in case the latter does not pay the debt.8Strictly speaking, guaranty and surety are nearly related, and many of the principles are common to both. However, under our civil law, they may be distinguished thus: A surety is usually bound with his principal by the same instrument, executed at the same time, and on the same consideration. He is an original promissor and debtor from the beginning, and is held, ordinarily, to know every default of his principal. Usually, he will not be discharged, either by the mere indulgence of the creditor to the principal, or by want of notice of the default of the principal, no matter how much he may be injured thereby. On the other hand, the contract of guaranty is the guarantor's own separate undertaking, in which the principal does not join. It is usually entered into before or after that of the principal, and is often supported on a separate consideration from that supporting the contract of the principal. The original contract of his principal is not his contract, and he is not bound to take notice of its non-performance. He is often discharged by the mere indulgence of the creditor to the principal, and is usually not liable unless notified of the default of the principal.9Simply put, a surety is distinguished from a guaranty in that a guarantor is the insurer of the solvency of the debtor and thus binds himself to pay if the principal isunable to paywhile a surety is the insurer of the debt, and he obligates himself to pay if the principaldoes not pay.10Based on the aforementioned definitions, it appears that the contract executed by petitioner in favor of SOLIDBANK, albeit denominated as a "Continuing Guaranty," is a contract of surety. The terms of the contract categorically obligates petitioner as "surety" to induce SOLIDBANK to extend credit to respondent spouses. This can be seen in the following stipulations.For and in consideration of any existing indebtedness to you of AGRO BROKERS, a single proprietorship owned by MR. RAUL P. CLAVERIA, of legal age, married and with business address . . . (hereinafter called the Borrower), for the payment of which theundersigned is now obligated to you as surety and in order to induceyou, in your discretion, at any time or from time to time hereafter, to make loans or advances or to extend credit in any other manner to, or at the request or for the account of the Borrower, either with or without purchase or discount, or to make any loans or advances evidenced or secured by any notes, bills receivable, drafts, acceptances, checks or other instruments or evidences of indebtedness . . . upon which the Borrower is or may become liable as maker, endorser, acceptor, or otherwise,the undersigned agrees to guarantee, and does hereby guarantee, the punctual payment, at maturity or upon demand, to you of any and all such instruments, loans, advances, credits and/or other obligations herein before referred to, and also any and all other indebtedness of every kind which is now or may hereafter become due or owing to you by the Borrower, together with any and all expenses which may be incurred by you in collecting all or any such instruments or other indebtedness or obligations hereinbefore referred to, and or in enforcing any rights hereunder, and also to make or cause any and all such payments to be made strictly in accordance with the terms and provisions of any agreement (g), express or implied, which has (have) been or may hereafter be made or entered into by the Borrower in reference thereto, regardless of any law, regulation or decree, now or hereafter in effect which might in any manner affect any of the terms or provisions of any such agreements(s) or your right with respect thereto as against the Borrower, or cause or permit to be invoked any alteration in the time, amount or manner of payment by the Borrower of any such instruments, obligations or indebtedness; . . . (Emphasis Ours)One need not look too deeply at the contract to determine the nature of the undertaking and the intention of the parties. The contract clearly disclose that petitioner assumed liability to SOLIDBANK, as a regular party to the undertaking and obligated itself as an original promissor. It bound itself jointly and severally to the obligation with the respondent spouses. In fact, SOLIDBANK need not resort to all other legal remedies or exhaust respondent spouses' properties before it can hold petitioner liable for the obligation. This can be gleaned from a reading of the stipulations in the contract, to wit:. . . If default be made in the payment of any of the instruments, indebtedness or other obligation hereby guaranteed by the undersigned, or if the Borrower, or the undersigned should die, dissolve, fail in business, or become insolvent, . . ., or if any funds or other property of the Borrower, or of the undersigned which may be or come into your possession or control or that of any third party acting in your behalf as aforesaid should be attached of distrained, or should be or become subject to any mandatory order of court or other legal process, then, or any time after the happening of any such event any or all of the instruments of indebtedness or other obligations hereby guaranteed shall, at your option become (for the purpose of this guaranty) due and payable by the undersigned forthwith without demand of notice, and full power and authority are hereby given you, in your discretion, to sell, assign and deliver all or any part of the property upon which you may then have a lien hereunder at any broker's board, or at public or private sale at your option, either for cash or for credit or for future delivery without assumption by you of credit risk, and without either the demand, advertisement or notice of any kind, all of which are hereby expressly waived. At any sale hereunder, you may, at your option, purchase the whole or any part of the property so sold, free from any right of redemption on the part of the undersigned, all such rights being also hereby waived and released. In case of any sale and other disposition of any of the property aforesaid, after deducting all costs and expenses of every kind for care, safekeeping, collection, sale, delivery or otherwise, you may apply the residue of the proceeds of the sale and other disposition thereof, to the payment or reduction, either in whole or in part, of any one or more of the obligations or liabilities hereunder of the undersigned whether or not except for disagreement such liabilities or obligations would then be due, making proper allowance or interest on the obligations and liabilities not otherwise then due, and returning the overplus, if any, to the undersigned; all without prejudice to your rights as against the undersigned with respect to any and all amounts which may be or remain unpaid on any of the obligations or liabilities aforesaid at any time (s).xxx xxx xxxShould the Borrower at this or at any future time furnish, or should be heretofore have furnished, another surety or sureties to guarantee the payment of his obligations to you, the undersigned hereby expressly waives all benefits to which the undersigned might be entitled under the provisions of Article 1837 of the Civil Code (beneficio division), the liability of the undersigned under any and all circumstances being joint and several; (Emphasis Ours)The use of the term "guarantee" does notipso factomean that the contract is one of guaranty. Authorities recognize that the word "guarantee" is frequently employed in business transactions to describe not the security of the debt but an intention to be bound by a primary or independent obligation.11As aptly observed by the trial court, the interpretation of a contract is not limited to the title alone but to the contents and intention of the parties.Having thus established that petitioner is a surety, Article 2080 of the Civil Code, relied upon by petitioner, finds no application to the case at bar. InBicol Savings and Loan Association vs.Guinhawa,12we have ruled that Article 2080 of the New Civil Code does not apply where the liability is as a surety, not as a guarantor.But even assuming that Article 2080 is applicable, SOLIDBANK's failure to register the chattel mortgage did not release petitioner from the obligation. In the Continuing Guaranty executed in favor of SOLIDBANK, petitioner bound itself to the contract irrespective of the existence of any collateral. It even released SOLIDBANK from any fault or negligence that may impair the contract. The pertinent portions of the contract so provides:. . . the undersigned (petitioner)who hereby agrees to be and remain bound upon this guaranty, irrespective of the existence, value or condition of any collateral, and notwithstanding any such change, exchange, settlement, compromise, surrender, release, sale, application, renewal or extension, and notwithstanding also that all obligations of the Borrower to you outstanding and unpaid at any time(s) may exceed the aggregate principal sum herein above prescribed.This is a Continuing Guaranty and shall remain in full force and effect until written notice shall have been received by you that it has been revoked by the undersigned, but any such notice shall not be released the undersigned from any liability as to any instruments, loans, advances or other obligations hereby guaranteed, which may be held by you, or in which you may have any interest, at the time of the receipt of such notice.No act or omission of any kind on your part in the premises shall in any event affect or impair this guaranty, nor shall same be affected by any change which may arise by reason of the death of the undersigned, of any partner (s) of the undersigned, or of the Borrower, or of the accession to any such partnership of any one or more new partners. (Emphasis supplied)In fine, we find the petition to be without merit as no reversible error was committed by respondent Court of Appeals in rendering the assailed decision.WHEREFORE, the decision of the respondent Court of Appeals is hereby AFFIRMED. Costs against the petitioner.SO ORDERED.

G.R. No. 142381 October 15, 2003PHILIPPINE BLOOMING MILLS, INC., and ALFREDO CHING,petitioners,vs.COURT OF APPEALS and TRADERS ROYAL BANK,respondents.D E C I S I O NCARPIO,J.:The CaseThis is a petition for review on certiorari1to annul the Decision2dated 16 July 1999 of the Court of Appeals in CA-G.R. CV No. 39690, as well as its Resolution dated 17 February 2000 denying the motion for reconsideration. The Court of Appeals affirmed with modification the Decision3dated 31 August 1992 rendered by Branch 113 of the Regional Trial Court of Pasay City ("trial court"). The trial courts Decision declared petitioner Alfredo Ching ("Ching") liable to respondent Traders Royal Bank ("TRB") for the payment of the credit accommodations extended to Philippine Blooming Mills, Inc. ("PBM").Antecedent FactsThis case stems from an action to compel Ching to pay TRB the following amounts:1.P959,611.96 under Letter of Credit No. 479 AD covered by Trust Receipt No. 106;42.P1,191,137.13 under Letter of Credit No. 563 AD covered by Trust Receipt No. 113;5and3.P3,500,000 under the trust loan covered by a notarized Promissory Note.6Ching was the Senior Vice President of PBM. In his personal capacity and not as a corporate officer, Ching signed a Deed of Suretyship dated 21 July 1977 binding himself as follows:xxx as primary obligor(s) and not as mere guarantor(s), hereby warrant to the TRADERS ROYAL BANK, its successors and assigns, the due and punctual payment by the following individuals and/or companies/firms, hereinafter called the DEBTOR(S), of such amounts whether due or not, as indicated opposite their respective names, to wit:NAME OF DEBTOR(S)AMOUNT OF OBLIGATION

PHIL. BLOOMING MILLS CORP.TEN MILLION PESOS

(P10,000,000.00)

owing to said TRADERS ROYAL BANK, hereafter called the CREDITOR, as evidenced by all notes, drafts, overdrafts and other credit obligations of every kind and nature contracted/incurred by said DEBTOR(S) in favor of said CREDITOR.In case of default by any and/or all of the DEBTOR(S) to pay the whole or part of said indebtedness herein secured at maturity, I/We, jointly and severally, agree and engage to the CREDITOR, its successors and assigns, the prompt payment, without demand or notice from said CREDITOR, of such notes, drafts, overdrafts and other credit obligations on which the DEBTOR(S) may now be indebted or may hereafter become indebted to the CREDITOR, together with all interests, penalty and other bank charges as may accrue thereon and all expenses which may be incurred by the latter in collecting any or all such instruments.I/WE further warrant the due and faithful performance by the DEBTOR(S) of all the obligations to be performed under any contracts, evidencing indebtedness/obligations and any supplements, amendments, charges or modifications made thereto, including but not limited to, the due and punctual payment by the said DEBTOR(S).I/WE hereby expressly waive notice of acceptance of this suretyship, and also presentment, demand, protest and notice of dishonor of any and all such instruments, loans, advances, credits, or other indebtedness or obligations hereinbefore referred to.MY/OUR liability on this Deed of Suretyship shall be solidary, direct and immediate and not contingent upon the pursuit by the CREDITOR, its successors or assigns, of whatever remedies it or they may have against the DEBTOR(S) or the securities or liens it or they may possess; and I/WE hereby agree to be and remain bound upon this suretyship, irrespective of the existence, value or condition of any collateral, and notwithstanding also that all obligations of the DEBTOR(S) to you outstanding and unpaid at any time may exceed the aggregate principal sum herein above stated.In the event of judicial proceedings, I/WE hereby expressly agree to pay the creditor for and as attorneys fees a sum equivalent to TEN PER CENTUM (10%) of the total indebtedness (principal and interest) then unpaid, exclusive of all costs or expenses for collection allowed by law.7(Emphasis supplied)On 24 March and 6 August 1980, TRB granted PBM letters of credit on application of Ching in his capacity as Senior Vice President of PBM. Ching later accomplished and delivered to TRB trust receipts, which acknowledged receipt in trust for TRB of the merchandise subject of the letters of credit. Under the trust receipts, PBM had the right to sell the merchandise for cash with the obligation to turn over the entire proceeds of the sale to TRB as payment of PBMs indebtedness. Letter of Credit No. 479 AD, covered by Trust Receipt No. 106, has a face value of US$591,043, while Letter of Credit No. 563 AD, covered by Trust Receipt No. 113, has a face value of US$155,460.34.Ching further executed an Undertaking for each trust receipt, which uniformly provided that:x x x6. All obligations of the undersigned under the agreement of trusts shall bear interest at the rate of __ per centum ( __%) per annum from the date due until paid.7. [I]n consideration of the Trust Receipt, the undersigned hereby jointly and severally undertake and agree to pay on demand on the said BANK, all sums and amounts of money which said BANK may call upon them to pay arising out of, pertaining to, and/or in any manner connected with this receipt. In case it is necessary to collect the draft covered by the Trust Receipt by or through an attorney-at-law, the undersigned hereby further agree(s) to pay an additional of 10% of the total amount due on the draft as attorneys fees, exclusive of all costs, fees and other expenses of collection but shall in no case be less thanP200.00"8(Emphasis supplied)On 27 April 1981, PBM obtained aP3,500,000 trust loan from TRB. Ching signed as co-maker in the notarized Promissory Note evidencing this trust loan. The Promissory Note reads:FOR VALUE RECEIVED THIRTY (30) DAYS after date, I/We, jointly and severally, promise to pay the TRADERS ROYAL BANK or order, at its Office in 4th Floor, Kanlaon Towers Bldg., Roxas Blvd., Pasay City, the sum of Pesos: THREE MILLION FIVE HUNDRED THOUSAND ONLY (P3,500,000.00), Philippine Currency, with the interest rate of Eighteen Percent (18%) per annum until fully paid.In case of non-payment of this note at maturity, I/We, jointly and severally, agree to pay an additional amount equivalent to two per cent (2%) of the principal sum per annum, as penalty and collection charges in the form of liquidated damages until fully paid,and the further sum of ten percent (10%) thereof in full, without any deduction, as and for attorneys fees whether actually incurred or not, exclusive of costs and other judicial/extrajudicial expenses; moreover, I/We jointly and severally, further empower and authorize the TRADERS ROYAL BANK at its option, and without notice to set off or to apply to the payment of this note any and all funds, which may be in its hands on deposit or otherwise belonging to anyone or all of us, and to hold as security therefor any real or personal property which may be in its possession or control by virtue of any other contract.9(Emphasis supplied)PBM defaulted in its payment of Trust Receipt No. 106 (Letter of Credit No. 479 AD) forP959,611.96, and of Trust Receipt No. 113 (Letter of Credit No. 563 AD) forP1,191,137.13. PBM also defaulted on itsP3,500,000 trust loan.On 1 April 1982, PBM and Ching filed a petition for suspension of payments with the Securities and Exchange Commission ("SEC"), docketed as SEC Case No. 2250.10The petition sought to suspend payment of PBMs obligations and prayed that the SEC allow PBM to continue its normal business operations free from the interference of its creditors. One of the listed creditors of PBM was TRB.11On 9 July 1982, the SEC placed all of PBMs assets, liabilities, and obligations under the rehabilitation receivership of Kalaw, Escaler and Associates.12On 13 May 1983, ten months after the SEC placed PBM under rehabilitation receivership, TRB filed with the trial court a complaint for collection against PBM and Ching. TRB asked the trial court to order defendants to pay solidarily the following amounts:(1)P6,612,132.74 exclusive of interests, penalties, and bank charges [representing its indebtedness arising from the letters of credit issued to its various suppliers];(2)P4,831,361.11, exclusive of interests, penalties, and other bank charges [due and owing from the trust loan of 27 April 1981 evidenced by a promissory note];(3)P783,300.00 exclusive of interests, penalties, and other bank charges [due and owing from the money market loan of 1 April 1981 evidenced by a promissory note];(4) To order defendant Ching to payP10,000,000.00 under the Deed of Suretyship in the event plaintiff can not recover the full amount of PBMs indebtedness from the latter;(5) The sum equivalent to 10% of the total sum due as and for attorneys fees;(6) Such other amounts that may be proven by the plaintiff during the trial, by way of damages and expenses for litigation.13On 25 May 1983, TRB moved to withdraw the complaint against PBM on the ground that the SEC had already placed PBM under receivership.14The trial court thus dismissed the complaint against PBM.15On 23 June 1983, PBM and Ching also moved to dismiss the complaint on the ground that the trial court had no jurisdiction over the subject matter of the case. PBM and Ching invoked the assumption of jurisdiction by the SEC over all of PBMs assets and liabilities.16TRB filed an opposition to the Motion to Dismiss. TRB argued that (1) Ching is being sued in his personal capacity as a surety for PBM; (2) the SEC decision declaring PBM in suspension of payments is not binding on TRB; and (3) Presidential Decree No. 1758 ("PD No. 1758"),17which Ching relied on to support his assertion that all claims against PBM are suspended, does not apply to Ching as the decree regulates corporate activities only.18In its order dated 15 August 1983,19the trial court denied the motion to dismiss with respect to Ching and affirmed its dismissal of the case with respect to PBM. The trial court stressed that TRB was holding Ching liable under the Deed of Suretyship. As Chings obligation was solidary, the trial court ruled that TRB could proceed against Ching as surety upon default of the principal debtor PBM. The trial court also held that PD No. 1758 applied only to corporations, partnerships and associations and not to individuals.Upon the trial courts denial of his Motion for Reconsideration, Ching filed a Petition for Certiorari and Prohibition20before the Court of Appeals. The appellate court granted Chings petition and ordered the dismissal of the case. The appellate court ruled that the SEC assumed jurisdiction over Ching and PBM to the exclusion of courts or tribunals of coordinate rank.TRB assailed the Court of Appeals Decision21before this Court. InTraders Royal Bank v. Court of Appeals,22this Court upheld TRB and ruled that Ching was merely a nominal party in SEC Case No. 2250. Creditors may sue individual sureties of debtor corporations, like Ching, in a separate proceeding before regular courts despite the pendency of a case before the SEC involving the debtor corporation.In his Answer dated 6 November 1989, Ching denied liability as surety and accommodation co-maker of PBM. He claimed that the SEC had already issued a decision23approving a revised rehabilitation plan for PBMs creditors, and that PBM obtained the credit accommodations for corporate purposes that did not redound to his personal benefit. He further claimed that even as a surety, he has the right to the defenses personal to PBM. Thus, his liability as surety would attach only if, after the implementation of payments scheduled under the rehabilitation plan, there would remain a balance of PBMs debt to TRB.24Although Ching admitted PBMs availment of the credit accommodations, he did not show any proof of payment by PBM or by him.TRB admitted certain partial payments on the PBM account made by PBM itself and by the SEC-appointed receiver.25Thus, the trial court had to resolve the following remaining issues:1. How much exactly is the corporate defendants outstanding obligation to the plaintiff?2. Is defendant Alfredo Ching personally answerable, and for exactly how much?26TRB presented Mr. Lauro Francisco, loan officer of the Remedial Management Department of TRB, and Ms. Carla Pecson, manager of the International Department of TRB, as witnesses. Both witnesses testified to the following:1. The existence of a Deed of Suretyship dated 21 July 1977 executed by Ching for PBMs liabilities to TRB up toP10,000,000;272. The application of PBM and grant by TRB on 13 March 1980 of Letter of Credit No. 479 AD for US$591,043, and the actual availment by PBM of the full proceeds of the credit accommodation;283. The application of PBM and grant by TRB on 6 August 1980 of Letter of Credit No. 563 AD for US$156,000, and the actual availment by PBM of the full proceeds of the credit accommodation;29and4. The existence of a trust loan ofP3,500,000 evidenced by a notarized Promissory Note dated 27 April 1981 wherein Ching bound himself solidarily with PBM;30and5. Per TRBs computation, Ching is liable forP19,333,558.16 as of 31 October 1991.31Ching presented Atty. Vicente Aranda, corporate secretary and First Vice President of the Human Resources Department of TRB, as witness. Ching sought to establish that TRBs Board of Directors adopted a resolution fixing the PBM account at an amount lower than what TRB wanted to collect from Ching. The trial court allowed Atty. Aranda to testify over TRBs manifestation that the Answer failed to plead the subject matter of his testimony. Atty. Aranda produced TRB Board Resolution No. 5935, series of 1990, which contained the minutes of the special meeting of TRBs Board of Directors held on 8 June 1990.32In the resolution, the Board of Directors advised TRBs Management "not to release Alfredo Ching from his JSS liability to the bank."33The resolution also stated the following:a) Accept theP1.373 million deposits remitted over a period of 17 years or until 2006 which shall be applied directly to the account (as remitted per hereto attached schedule). The amount ofP1.373 million shall be considered as full payment of PBMs account. (The receiver is amenable to this alternative)The initial deposit/remittance which amounts toP150,000.00 shall be remitted upon approval of the above and conforme to PISCOR and PBM. Subsequent deposits shall start on the 3rd year and annually thereafter (every June 30th of the year) until June 30, 2006.Failure to pay one annual installment shall make the whole obligation due and demandable.b) Write-off immediatelyP4.278 million. The balance [of]P1.373 million to remain outstanding in the books of the Bank. Said balance will equal the deposits to be remitted to the Bank for a period of 17 years.34However, Atty. Aranda himself testified that both items (a) and (b) quoted above were never complied with or implemented. Not only was there no initial deposit ofP150,000 as required in the resolution, TRB also disapproved the document prepared by the receiver, which would have released Ching from his suretyship.35The Ruling of the Trial CourtThe trial court found Ching liable to TRB forP19,333,558.16 under the Deed of Suretyship. The trial court explained:[T]he liability of Ching as a surety attaches independently from his capacity as a stockholder of the Philippine Blooming Mills. Indisputably, under the Deed of Suretyship defendant Ching unconditionally agreed to assume PBMs liability to the plaintiff in the event PBM defaulted in the payment of the said obligation in addition to whatever penalties, expenses and bank charges that may occur by reason of default. Clear enough, under the Deed of Suretyship (Exh. J), defendant Ching bound himself jointly and severally with PBM in the payment of the latters obligation to the plaintiff. The obligation being solidary, the plaintiff Bank can hold Ching liable upon default of the principal debtor. This is explicitly provided in Article 1216 of the New Civil Code already quoted above.36The dispositive portion of the trial courts Decision reads:WHEREFORE, judgment is hereby rendered declaring defendant Alfredo Ching liable to plaintiff bank in the amount ofP19,333,558.16 (NINETEEN MILLION THREE HUNDRED THIRTY THREE THOUSAND FIVE HUNDRED FIFTY EIGHT & 16/100) as of October 31, 1991, and to pay the legal interest thereon from such date until it is fully paid. To pay plaintiff 5% of the entire amount by way of attorneys fees.SO ORDERED.37The Ruling of the Court of AppealsOn appeal, Ching stated that as surety and solidary debtor, he should benefit from the changed nature of the obligation as provided in Article 1222 of the Civil Code, which reads:Article 1222. A solidary debtor may, in actions filed by the creditor, avail himself of all defenses which are derived from the nature of the obligation and of those which are personal to him, or pertain to his own share. With respect to those which personally belong to the others, he may avail himself thereof only as regards that part of the debt for which the latter are responsible.Ching claimed that his liability should likewise be reduced since the equitable apportionment of PBMs remaining assets among its creditors under the rehabilitation proceedings would have the effect of reducing PBMs liability. He also claimed that the amount for which he was being held liable was excessive. He contended that the outstanding principal balance, as stated in TRB Board Resolution No. 5893-1990, was onlyP5,650,749.09.38Ching also contended that he was not liable for interest, as the loan documents did not stipulate the interest rate, pursuant to Article 1956 of the Civil Code.39Finally, Ching asserted that the Deed of Suretyship executed on 21 July 1977 could not guarantee obligations incurred after its execution.40TRB did not file its appellees brief. Thus, the Court of Appeals resolved to submit the case for decision.41The Court of Appeals considered the following issues for its determination:1. Whether the Answer of Ching amounted to an admission of liability.2. Whether Ching can still be sued as a surety after the SEC placed PBM under rehabilitation receivership, and if in the affirmative, for how much.42The Court of Appeals resolved the first two questions in favor of TRB. The appellate court stated:Ching did not deny under oath the genuineness and due execution of the L/Cs, Trust Receipts, Undertaking, Deed of Surety, and the 3.5 Million Peso Promissory Note upon which TRBs action rested. He is, therefore, presumed to be liable unless he presents evidence showing payment, partially or in full, of these obligations (Investment and Underwriting Corporation of the Philippines v. Comptronics Philippines, Inc. and Gene v. Tamesis, 192 SCRA 725 [1990]).As surety of a corporation placed under rehabilitation receivership, Ching can answer separately for the obligations of debtor PBM (Rizal Banking Corporation v. Court of Appeals, Philippine Blooming Mills, Inc., and Alfredo Ching, 178 SCRA 738 [1990], and Traders Royal Bank v. Philippine Blooming Mills and Alfredo Ching, 177 SCRA 788 [1989]).Even a[n] SEC injunctive order cannot suspend payment of the suretys obligation since the rehabilitation receivers are limited to the existing assets of the corporation.43The dispositive portion of the Decision of the Court of Appeals reads:WHEREFORE, the judgment of the lower court is hereby AFFIRMED but modified with respect to the amount of liability of defendant Alfredo Ching which is lowered fromP19,333,558.16 toP15,773,708.78 with legal interest of 12% per annum until it is fully paid.SO ORDERED.44The Court of Appeals denied Chings Motion for Reconsideration for lack of merit.Hence, this petition.IssuesChing assigns the following as errors of the Court of Appeals:1. THE COURT OF APPEALS COMMITTED AN ERROR WHEN IT RULED THAT PETITIONER ALFREDO CHING WAS LIABLE FOR OBLIGATIONS CONTRACTED BY PBM LONG AFTER THE EXECUTION OF THE DEED OF SURETYSHIP.2. THE COURT OF APPEALS COMMITTED AN ERROR WHEN IT RULED THAT THE PETITIONERS WERE LIABLE FOR THE TRUST RECEIPTS DESPITE THE FACT THAT PRIVATE RESPONDENT HAD PREVENTED THEIR FULFILLMENT.3. THE COURT OF APPEALS COMMITTED AN ERROR WHEN IT FOUND PETITIONER ALFREDO CHING LIABLE FORP15,773,708.78 WITH LEGAL INTEREST AT 12% PER ANNUM UNTIL FULLY PAID DESPITE THE FACT THAT UNDER THE REHABILITATION PLAN OF PETITIONER PBM, WHICH WAS APPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, PRIVATE RESPONDENT IS ONLY ENTITLED TOP1,373,415.00.45Ching asserted that the Deed of Suretyship dated 21 July 1977 could not answer for obligations not yet in existence at the time of its execution. Specifically, Ching maintained that the Deed of Suretyship could not answer for debts contracted by PBM in 1980 and 1981. Ching contended that no accessory contract of suretyship could arise without an existing principal contract of loan. Ching likewise argued that TRB could no longer claim on the trust receipts because TRB had already taken the properties subject of the trust receipts. Ching likewise maintained that his obligation as surety could not exceed theP1,373,415 apportioned to PBM under the SEC-approved rehabilitation plan.In its Comment, TRB asserted that the first two assigned errors raised factual issues not brought before the trial court. Furthermore, TRB pointed out that Ching never presented PBMs rehabilitation plan before the trial court. TRB also stated that the Supreme Court ruling inTraders Royal Bank v. Court of Appeals46constitutes res judicata between the parties. Therefore, TRB could proceed against Ching separately from PBM to enforce in full Chings liability as surety.47The Ruling of the CourtThe petition has no merit.The case before us is an offshoot of the trial courts denial of Chings motion to have the case dismissed against him. The petition is a thinly veiled attempt to make this Court reconsider its decision in the prior case of Traders Royal Bank v. Court of Appeals.48This Court has already resolved the issue of Chings separate liability as a surety despite the rehabilitation proceedings before the SEC. We held in Traders Royal Bank that:Although Ching was impleaded in SEC Case No. 2250, as a co-petitioner of PBM, the SEC could not assume jurisdiction over his person and properties. The Securities and Exchange Commission was empowered, as rehabilitation receiver, to take custody and control of the assets and properties of PBM only, for the SEC has jurisdiction over corporations only [and] not over private individuals, except stockholders in an intra-corporate dispute (Sec. 5, P.D. 902-A and Sec. 2 of P.D. 1758). Being a nominal party in SEC Case No. 2250, Chings properties were not included in the rehabilitation receivership that the SEC constituted to take custody of PBMs assets. Therefore, the petitioner bank was not barred from filing a suit against Ching, as a surety for PBM. An anomalous situation would arise if individual sureties for debtor corporations may escape liability by simply co-filing with the corporation a petition for suspension of payments in the SEC whose jurisdiction is limited only to corporations and their corporate assets.x x xChing can be sued separately to enforce his liability as surety for PBM, as expressly provided by Article 1216 of the New Civil Code.x x xIt is elementary that a corporation has a personality distinct and separate from its individual stockholders and members. Being an officer or stockholder of a corporation does not make ones property the property also of the corporation, for they are separate entities (Adelio Cruz vs. Quiterio Dalisay, 152 SCRA 482).Chings act of joining as a co-petitioner with PBM in SEC Case No. 2250 did not vest in the SEC jurisdiction over his person or property, for jurisdiction does not depend on the consent or acts of the parties but upon express provision of law (Tolentino vs. Social Security System, 138 SCRA 428; Lee vs. Municipal Trial Court of Legaspi City, Br. I, 145 SCRA 408). (Emphasis supplied)Traders Royal Bank has fully resolved the issue regarding Chings liability as a surety of the credit accommodations TRB extended to PBM. The decision amounts to res judicata49which bars Ching from raising the same issue again. Hence, the only question that remains is the amount of Chings liability. Nevertheless, we shall resolve the issues Ching has raised in his attempt to escape liability under his surety.Whether Ching is liable for obligations PBM contracted after execution of the Deed of SuretyshipChing is liable for credit obligations contracted by PBM against TRB before and after the execution of the 21 July 1977 Deed of Suretyship. This is evident from the tenor of the deed itself, referring to amounts PBM "may now be indebted or may hereafter become indebted" to TRB.The law expressly allows a suretyship for "future debts". Article 2053 of the Civil Code provides:A guaranty may also be given as security for future debts, the amount of which is not yet known; there can be no claim against the guarantor until the debt is liquidated. A conditional obligation may also be secured. (Emphasis supplied)Furthermore, this Court has ruled inDio v. Court of Appeals50that:Under the Civil Code, a guaranty may be given to secure even future debts, the amount of which may not be known at the time the guaranty is executed. This is the basis for contracts denominated as continuing guaranty or suretyship. A continuing guaranty is one which is not limited to a single transaction, but which contemplates a future course of dealing, covering a series of transactions, generally for an indefinite time or until revoked. It is prospective in its operation and is generally intended to provide security with respect to future transactions within certain limits, and contemplates a succession of liabilities, for which, as they accrue, the guarantor becomes liable. Otherwise stated, a continuing guaranty is one which covers all transactions, including those arising in the future, which are within the description or contemplation of the contract of guaranty, until the expiration or termination thereof. A guaranty shall be construed as continuing when by the terms thereof it is evident that the object is to give a standing credit to the principal debtor to be used from time to time either indefinitely or until a certain period; especially if the right to recall the guaranty is expressly reserved. Hence, where the contract states that the guaranty is to secure advances to be made "from time to time," it will be construed to be a continuing one.In other jurisdictions, it has been held that the use of particular words and expressions such as payment of "any debt," "any indebtedness," or "any sum," or the guaranty of "any transaction," or money to be furnished the principal debtor "at any time," or "on such time" that the principal debtor may require, have been construed to indicate a continuing guaranty.Whether Chings liability is limited to the amount stated in PBMs rehabilitation planChing would like this Court to rule that his liability is limited, at most, to the amount stated in PBMs rehabilitation plan. In claiming this reduced liability, Ching invokes Article 1222 of the Civil Code which reads:Art. 1222. A solidary debtor may, in actions filed by the creditor, avail himself of all defenses which are derived from the nature of the obligation and of those which are personal to him, or pertain to his own share. With respect to those which personally belong to the others, he may avail himself thereof only as regards that part of the debt for which the latter are responsible.In granting the loan to PBM, TRB required Chings surety precisely to insure full recovery of the loan in case PBM becomes insolvent or fails to pay in full. This was the very purpose of the surety. Thus, Ching cannot use PBMs failure to pay in full as justification for his own reduced liability to TRB. As surety, Ching agreed to pay in full PBMs loan in case PBM fails to pay in full for any reason, including its insolvency.TRB, as creditor, has the right under the surety to proceed against Ching for the entire amount of PBMs loan. This is clear from Article 1216 of the Civil Code: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. (Emphasis supplied)Ching further claims a reduced liability under TRB Board Resolution No. 5935. This resolution states that PBMs outstanding loans may be reduced toP1.373 million subject to certain conditions like the payment ofP150,000 initial payment.51The resolution also states that TRB should not release Chings solidary liability under his surety. The resolution even directs TRBs management to study Chings criminal liability under the trust documents.52Chings own witness testified that Resolution No. 5935 was never implemented. For one, PBM or its receiver never paid theP150,000 initial payment to TRB. TRB also rejected the document that PBMs receiver presented which would have released Ching from his suretyship. Clearly, Ching cannot rely on Resolution No. 5935 to escape liability under his suretyship.Chings attempts to have this Court review the factual issues of the case are improper. It is not a function of the Supreme Court to assess and evaluate again the evidence, testimonial and evidentiary, adduced by the parties particularly where the findings of both the trial court and the appellate court coincide on the matter.53Whether Ching is liable for the trust receiptsChing is still liable for the amounts stated in the letters of credit covered by the trust receipts. Other than his bare allegations, Ching has not shown proof of payment or settlement with TRB. Atty. Vicente Aranda, TRBs corporate secretary and First Vice President of its Human Resource Management Department, testified that the conditions in the TRB board resolution presented by Ching were not met or implemented, thus:ATTY. AZURAQ Going into the resolution itself. A certain stipulation ha[s] been outlined, and may I refer you to condition or step No. 1, which reads: "a) Accept theP1.373 million deposits remitted over a period of 17 years or until 2006 which shall be applied directly to the account (as remitted per hereto attached schedule). The amount ofP1.373 million shall be considered as full payment of PBMs account. (The receiver is amenable to this alternative.) The initial deposit/remittance which amounts toP150,000.00 shall be remitted upon approval of the above and conforme of PISCOR [xxx] and PBM. Subsequent deposits shall start on the 3rd year and annually thereafter (every June 30th of the year) until June 30, 2006.Failure to pay one annual installment shall make the whole obligation due and demandable. Now Mr. Witness, would you be in a position to inform [the court] if these conditions listed in item (a) in Resolution No. 5935, series of 1990, were implemented or met?A Yes. I know for a fact that the conditions, more particularly the initial deposit/remittance in the amount ofP150,000.00 which have to be done with approval was not remitted or met.Q Will you clarify your answer. Would you be in a position to inform the court if those conditions were met? Because your initial answer was yes.A Yes sir, I am in a position to state that these conditions were not met.Q Let me refer you to the condition listed as item (b) of the same resolution which I read and quote: "Write off immediatelyP4.278 million. The balance ofP1.373 million to remain outstanding in the books of the bank. Said balance will be remitted to the Bank for a period of 17 years." Mr. Witness, would you be in a position to inform the court if the bank implemented that particular condition?A In the implementation of this settlement the receiver prepared a document for approval and conformity of the bank. The said document would in effect release the suretyship of Alfredo Ching and for that reason the bank refused or denied fixing its conformity and approval with the court.xxxATTY. ATIENZA ON REDIRECT EXAMINATIONQ Mr. Witness you stated that the reason why the plaintiff bank did not implement these conditionalities [sic] was because the former defendant corporation requested that the suretyship of Alfredo Ching be released, is that correct?A I did not say that. I said that in effect the document prepared by the lawyer of the receiver xxx the bank would release the suretyship of Alfredo Ching, that is why the bank is not amenable to such a document.Q Despite this approved resolution the bank, because of said requirement or conformity did not seek to implement these conditionalities [sic]?A Yes sir because the conditions imposed by the board is not being followed in that document because it was the condition of the board that the suretyship should not be released but the document being presented to the bank for signature and conformity in effect if signed would release the suretyship. So it would be a violation with the approval of the board so the bank did not sign the conformity.54Ching also claims that TRB prevented PBM from fulfilling its obligations under the trust receipts when TRB, together with other creditor banks, took hold of PBMs inventories, including the goods covered by the trust receipts. Ching asserts that this act of TRB released him from liability under the suretyship. Ching forgets that he executed, on behalf of PBM, separate Undertakings for each trust receipt expressly granting to TRB the right to take possession of the goods at any time to protect TRBs interests. TRB may exercise such right without waiving its right to collect the full amount of the loan to PBM. The Undertakings also provide that any suspension of payment or any assignment by PBM for the benefit of creditors renders the loan due and demandable. Thus, the separate Undertakings uniformly provide:2. That the saidBANK may at any time cancel the foregoing trust and take possession of said merchandise with the right to sell and dispose of the same under such terms and conditions it may deem best, or of the proceeds of such of the same as may then have been sold,wherever the said merchandise or proceeds may then be found and all the provisions of the Trust Receipt shall apply to and be deemed to include said above-mentioned merchandise if the same shall have been made up or used in the manufacture of any other goods, or merchandise, and the said BANK shall have the same rights and remedies against the said merchandise in its manufactured state, or the product of said manufacture as it would have had in the event that such merchandise had remained [in] its original state and irrespective of the fact that other and different merchandise is used in completing such manufacture. In the event ofany suspension, or failure or assignment for the benefit of creditors on the part of the undersigned or of the non-fulfillment of any obligation, or of the non-payment at maturity of any acceptancemade under said credit, or any other credit issued by the said BANK on account of the undersigned or of thenon-payment of any indebtedness on the part of the undersigned to the said BANK, all obligations, acceptances, indebtedness and liabilities whatsoever shall thereupon without notice mature and become due and payable and the BANK may avail of the remedies provided herein.55(Emphasis supplied)Presidential Decree No. 115 ("PD No. 115"), otherwise known as the Trust Receipts Law, expressly allows TRB to take possession of the goods covered by the trust receipts. Thus, Section of 7 of PD No. 115 states:SECTION 7. Rights of the entruster. The entruster shall be entitled to the proceeds from the sale of the goods, documents or instruments released under a trust receipt to the entrustee to the extent of the amount owing to the entruster or as appears in the trust receipt, or to the return of the goods, documents or instruments in case of non-sale, and to the enforcement of all other rights conferred on him in the trust receipt provided such are not contrary to the provisions of this Decree.The entruster may cancel the trust and take possession of the goods, documents or instruments subject of the trust or of the proceeds realized therefrom at any time upon default or failure of the entrustee to comply with any of the terms and conditions of the trust receipt or any other agreement between the entruster and the entrustee,and the entruster in possession of the goods, documents or instruments may, on or after default, give notice to the entrustee of the intention to sell, and may, not less than five days after serving or sending of such notice, sell the goods, documents or instruments at public or private sale, and the entruster may, at a public sale, become a purchaser.The proceeds of any such sale, whether public or private, shall be applied (a) to the payment of the expenses thereof; (b) to the payment of the expenses of re-taking, keeping and storing the goods, documents or instruments; (c) to the satisfaction of the entrustees indebtedness to the entruster. The entrustee shall receive any surplus but shall be liable to the entruster for any deficiency. Notice of sale shall be deemed sufficiently given if in writing, and either personally served on the entrustee or sent by post-paid ordinary mail to the entrustees last known business address. (Emphasis supplied)Thus, even though TRB took possession of the goods covered by the trust receipts, PBM and Ching remained liable for the entire amount of the loans covered by the trust receipts.Absent proof of payment or settlement of PBM and Chings credit obligations with TRB, Chings liability is what the Deed of Suretyship stipulates, plus the applicable interest and penalties. The trust receipts, as well as the Letter of Undertaking dated 16 April 198056executed by PBM, stipulate in writing the payment of interest without specifying the rate. In such a case, the applicable interest rate shall be the legal rate, which is now 12% per annum.57This is in accordance with Central Bank Circular No. 416, which states:By virtue of the authority granted to it under Section 1 of Act No. 2655, as amended, otherwise known as the "Usury Law," the Monetary Board, in its Resolution No. 1622 dated July 29, 1974, has prescribed that the rate of interest for the loan or forbearance of any money, goods or credits and the rate allowed in judgments, in the absence of express contract as to such rate of interest, shall be twelve per cent (12%) per annum. (Emphasis supplied)On the other hand, the Promissory Note evidencing theP3,500,000 trust loan provides for 18% interest per annum plus 2% penalty interest per annum in case of default. This stipulated interest should continue to run until full payment of theP3,500,000 trust loan. In addition, the accrued interest on all the credit accommodations should earn legal interest from the date of filing of the complaint pursuant to Article 2212 of the Civil Code.Art. 2212. Interest due shall earn legal interest from the time it is judicially demanded, although the obligation may be silent upon this point.The trial court found and the appellate court affirmed that the outstanding principal amounts as of the filing of the complaint with the trial court on 13 May 1983 wereP959,611.96 under Trust Receipt No. 106,P1,191,137.13 under Trust Receipt No. 113, andP3,500,000 for the trust loan. As extracted from TRBs Statement of Account as of 31 October 1991,58the accrued interest on the trust receipts and the trust loan as of the filing of the complaint on 13 May 1983 wereP311,387.5159under Trust Receipt No. 106,P338,739.8160under Trust Receipt No. 113, andP1,287,616.4461under the trust loan. The penalty interest on the trust loan amounted toP137,315.07.62Ching did not rebut this Statement of Account which TRB presented during trial.Thus, the following is the summary of Chings liability under the suretyship as of 13 May 1983, the date of filing of TRBs complaint with the trial court:1.On Trust Receipt No. 106 (Letter of Credit No. 479 AD)Outstanding PrincipalP959,611.96Accrued Interest (12% per annum) 311,387.512.On Trust Receipt No. 113 (Letter of Credit No. 563 AD)Outstanding PrincipalP1,191,137.13Accrued Interest (12% per annum) 338,739.823. On the Trust Loan (Promissory Note)Outstanding PrincipalP3,500,000.00Accrued Interest (18% per annum) 1,287,616.44Accrued Penalty Interest (2% per annum) 137,315.07WHEREFORE, we AFFIRM the decision of the Court of Appeals with MODIFICATION. Petitioner Alfredo Ching shall pay respondent Traders Royal Bank the following (1) on the credit accommodations under the trust receipts, the total principal amount ofP2,150,749.09 with legal interest at 12% per annum from 14 May 1983 until full payment; (2) on the trust loan evidenced by the Promissory Note, the principal sum ofP3,500,000 with 20% interest per annum from 14 May 1983 until full payment; (3) on the total accrued interest as of 13 May 1983,P2,075,058.84 with 12% interest per annum from 14 May 1983 until full payment. Petitioner Alfredo Ching shall also pay attorneys fees to respondent Traders Royal Bank equivalent to 5% of the total principal and interest.SO ORDERED.

G.R. No. 160324 November 15, 2005INTERNATIONAL FINANCE CORPORATION,Petitioner,vs.IMPERIAL TEXTILE MILLS, INC.,*Respondent.D E C I S I O NPANGANIBAN,J.:he terms of a contract govern the rights and obligations of the contracting parties. When the obligor undertakes to be "jointly and severally" liable, it means that the obligation is solidary.If solidary liability was instituted to "guarantee" a principal obligation, the law deems the contract to be one of suretyship.The creditor in the present Petition was able to show convincingly that, although denominated as a "Guarantee Agreement," the Contract was actually a surety. Notwithstanding the use of the words "guarantee" and "guarantor," the subject Contract was indeed a surety, because its terms were clear and left no doubt as to the intention of the parties.The CaseBefore us is a Petition for Review1under Rule 45 of the Rules of Court, assailing the February 28, 2002 Decision2and September 30, 2003 Resolution3of the Court of Appeals (CA) in CA-GR CV No. 58471. The challenged Decision disposed as follows:"WHEREFORE, the appeal isPARTIALLY GRANTED. The decision of the trial court isMODIFIEDto read as follows:"1. Philippine Polyamide Industrial Corporation isORDEREDto pay [Petitioner] International Finance Corporation, the following amounts:(a) US$2,833,967.00 with accrued interests as provided in the Loan Agreement;(b) Interest of 12% per annum on accrued interest, which shall be counted from the date of filing of the instant action up to the actual payment;(c)P73,340.00 as attorneys fees;(d) Costs of suit."2. The guarantor Imperial Textile Mills, Inc. together with Grandtex isHELDsecondarily liable to pay the amount herein adjudged to [Petitioner] International Finance Corporation."4The assailed Resolution denied both parties respective Motions for Reconsideration.The FactsThe facts are narrated by the appellate court as follows:"On December 17, 1974, [Petitioner] International Finance Corporation (IFC) and [Respondent] Philippine Polyamide Industrial Corporation (PPIC) entered into a loan agreement wherein IFC extended to PPIC a loan of US$7,000,000.00, payable in sixteen (16) semi-annual installments of US$437,500.00 each, beginning June 1, 1977 to December 1, 1984, with interest at the rate of 10% per annum on the principal amount of the loan advanced and outstanding from time to time. The interest shall be paid in US dollars semi-annually on June 1 and December 1 in each year and interest for any period less than a year shall accrue and be pro-rated on the basis of a 360-day year of twelve 30-day months."On December 17, 1974, a Guarantee Agreement was executed with x x x Imperial Textile Mills, Inc. (ITM), Grand Textile Manufacturing Corporation (Grandtex) and IFC as parties thereto. ITM and Grandtex agreed to guarantee PPICs obligations under the loan agreement."PPIC paid the installments due on June 1, 1977, December 1, 1977 and June 1, 1978. The payments due on December 1, 1978, June 1, 1979 and December 1, 1979 were rescheduled as requested by PPIC. Despite the rescheduling of the installment payments, however, PPIC defaulted. Hence, on April 1, 1985, IFC served a written notice of default to PPIC demanding the latter to pay the outstanding principal loan and all its accrued interests. Despite such notice, PPIC failed to pay the loan and its interests."By virtue of PPICs failure to pay, IFC, together with DBP, applied for the extrajudicial foreclosure of mortgages on the real estate, buildings, machinery, equipment plant and all improvements owned by PPIC, located at Calamba, Laguna, with the regional sheriff of Calamba, Laguna. On July 30, 1985, the deputy sheriff of Calamba, Laguna issued a notice of extrajudicial sale. IFC and DBP were the only bidders during the auction sale. IFCs bid was forP99,269,100.00 which was equivalent to US$5,250,000.00 (at the prevailing exchange rate ofP18.9084 = US$1.00). The outstanding loan, however, amounted to US$8,083,967.00 thus leaving a balance of US$2,833,967.00. PPIC failed to pay the remaining balance."Consequently, IFC demanded ITM and Grandtex, as guarantors of PPIC, to pay the outstanding balance. However, despite the demand made by IFC, the outstanding balance remained unpaid."Thereafter, on May 20, 1988, IFC filed a complaint with the RTC of Manila against PPIC and ITM for the payment of the outstanding balance plus interests and attorneys fees."The trial court held PPIC liable for the payment of the outstanding loan plus interests. It also ordered PPIC to pay IFC its claimed attorneys fees. However, the trial court relieved ITM of its obligation as guarantor. Hence, the trial court dismissed IFCs complaint against ITM.x x x x x x x x x"Thus, apropos the decision dismissing the complaint against ITM, IFC appealed [to the CA]."5Ruling of the Court of AppealsThe CA reversed the Decision of the trial court, insofar as the latter exonerated ITM from any obligation to IFC. According to the appellate court, ITM bound itself under the "Guarantee Agreement" to pay PPICs obligation upon default.6ITM was not discharged from its obligation as guarantor when PPIC mortgaged the latters properties to IFC.7The CA, however, held that ITMs liability as a guarantor would arise only if and when PPIC could not pay. Since PPICs inability to comply with its obligation was not sufficiently established, ITM could not immediately be made to assume the liability.8The September 30, 2003 Resolution of the CA denied reconsideration.9Hence, this Petition.10The IssuesPetitioner states the issues in this wise:"I. Whether or not ITM and Grandtex11are sureties and therefore, jointly and severally liable with PPIC, for the payment of the loan."II. Whether or not the Petition raises a question of law."III. Whether or not the Petition raises a theory not raised in the lower court."12The main issue is whether ITM is a surety, and thus solidarily liable with PPIC for the payment of the loan.The Courts RulingThe Petition is meritorious.Main Issue:Liability of Respondent Underthe Guarantee AgreementThe present controversy arose from the following Contracts: (1) the Loan Agreement dated December 17, 1974, between IFC and PPIC;13and (2) the Guarantee Agreement dated December 17, 1974, between ITM and Grandtex, on the one hand, and IFC on the other.14IFC claims that, under the Guarantee Agreement, ITM bound itself as a surety to PPICs obligations proceeding from the Loan Agreement.15For its part, ITM asserts that, by the terms of the Guarantee Agreement, it was merely a guarantor16and not a surety. Moreover, any ambiguity in the Agreement should be construed against IFC -- the party that drafted it.17Language of theContractThe premise of the Guarantee Agreement is found in its preambular clause, which reads:"Whereas,"(A) By an Agreement of even date herewith between IFC and PHILIPPINE POLYAMIDE INDUSTRIAL CORPORATION (herein called the Company), which agreement is herein called the Loan Agreement, IFC agrees to extend to the Company a loan (herein called the Loan) of seven million dollars ($7,000,000) on the terms therein set forth, including a provision that all or part of the Loan may be disbursed in a currency other than dollars, but only on condition that the Guarantors agree to guarantee the obligations of the Company in respect of the Loan as hereinafter provided."(B) The Guarantors, in order to induce IFC to enter into the Loan Agreement, and in consideration of IFC entering into said Agreement, have agreed so to guaranteesuch obligations of the Company."18Theobligationsof the guarantors are meticulously expressed in the following provision:"Section 2.01. The Guarantorsjointly and severally, irrevocably, absolutely and unconditionally guarantee, asprimary obligors and not as sureties merely, the due and punctual payment of the principal of, and interest and commitment charge on, the Loan, and the principal of, and interest on, the Notes, whether at stated maturity or upon prematuring, all as set forth in the Loan Agreement and in the Notes."19The Agreement uses "guarantee" and "guarantors," prompting ITM to base its argument on those words.20This Court is not convinced that the use of the two words limits the Contract to a mere guaranty. The specific stipulations in the Contract show otherwise.Solidary LiabilityAgreed to by ITMWhile referring to ITM as a guarantor, the Agreement specifically stated that the corporation was "jointly and severally" liable. To put emphasis on the nature of that liability, the Contract further stated that ITM was a primary obligor, not ameresurety. Those stipulations meant only one thing: thatat bottom, and to all legal intents and purposes, it was a surety.Indubitably therefore, ITM bound itself to be solidarily21liable with PPIC for the latters obligations under the Loan Agreement with IFC. ITM thereby brought itself to the level of PPIC and could not be deemed merely secondarily liable.Initially, ITM was a stranger to the Loan Agreement between PPIC and IFC. ITMs liability commenced only when it guaranteed PPICs obligation. It became a surety when it bound itself solidarily with the principal obligor. Thus, the applicable law is as follows:"Article 2047. By guaranty, a person, called the guarantor binds himself to the creditor to fulfill the obligation of the principal in case the latter should fail to do so."If a person binds himself solidarily with the principal debtor, the provisions of Section 4, Chapter 3, Title I of this Book shall be observed. In such case the contract shall be called suretyship."22The aforementioned provisions refer to Articles 1207 to 1222 of the Civil Code on "Joint and Solidary Obligations." Relevant to this case is Article 1216, which states:"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."Pursuant to this provision, petitioner (as creditor) was justified in taking action directly against respondent.No Ambiguity in theUndertakingThe Court does not find any ambiguity in the provisions of the Guarantee Agreement. When qualified by the term "jointly and severally," the use of the word "guarantor" to refer to a "surety" does not violate the law.23As Article 2047 provides, a suretyship is created when a guarantor binds itself solidarily with the principal obligor. Likewise, the phrase in the Agreement -- "as primary obligor and not merely as surety" -- stresses that ITM is being placed on the same level as PPIC. Those words emphasize the nature of their liability, which the law characterizes as a suretyship.The use of the word "guarantee" does notipso factomake the contract one of guaranty.24This Court has recognized that the word is frequently employed in business transactions to describe the intention to be bound by a primary or an independent obligation.25The very terms of a contract govern the obligations of the parties or the extent of the obligors liability. Thus, this Court has ruled in favor of suretyship, even though contracts were denominated as a "Guarantors Undertaking"26or a "Continuing Guaranty."27Contracts have the force of law between the parties,28who are free to stipulate any matter not contrary to law, morals, good customs, public order or public policy.29None of these circumstances are present, much less alleged by respondent. Hence, this Court cannot give a different meaning to the plain language of the Guarantee Agreement.Indeed, the finding of solidary liability is in line with the premise provided in the "Whereas" clause of the Guarantee Agreement. The execution of the Agreement was a condition precedent for the approval of PPICs loan from IFC. Consistent with the position of IFC as creditor was its requirement of a higher degree of liability from ITM in case PPIC committed a breach. ITM agreed with the stipulation in Section 2.01 and is now estopped from feigning ignorance of its solidary liability. The literal meaning of the stipulations control when the terms of the contract are clear and there is no doubt as to the intention of the parties.30We note that the CA denied solidary liability, on the theory that the parties would not have executed a Guarantee Agreement if they had intended to name ITM as a primary obligor.31The appellate court opined that ITMs undertaking was collateral to and distinct from the Loan Agreement. On this point, the Court stresses that a suretyship is merely an accessory or a collateral to a principal obligation.32Although a surety contract is secondary to the principal obligation, the liability of the surety is direct, primary and absolute; or equivalent to that of a regular party to the undertaking.33A surety becomes liable to the debt and duty of the principal obligor even without possessing a direct or personal interest in the obligations constituted by the latter.34ITMs Liability as SuretyWith the present finding that ITM is a surety, it is clear that the CA erred in declaring the former secondarily liable.35A surety is considered in law to be on the same footing as the principal debtor in relation to whatever is adjudged against the latter.36Evidently, the dispositive portion of the assailed Decision should be modified to require ITM to pay the amount adjudged in favor of IFC.Peripheral IssuesIn addition to the main issue, ITM raised procedural infirmities allegedly justifying the denial of the present Petition. Before the trial court and the CA, IFC had allegedly instituted different arguments that effectively changed the corporations theory on appeal, in violation of this Courts previous pronouncements.37ITM furtherclaims that the main issue in the present case is a question of fact that is not cognizable by this Court.38These contentions deserve little consideration.Alleged Change ofTheory on AppealPetitioners arguments before the trial court (that ITM was a "primary obligor") and before the CA (that ITM was a "surety") were related and intertwined in the action to enforce the solidary liability of ITM under the Guarantee Agreement. We emphasize that the terms "primary obligor" and "surety" were premised on the same stipulations in Section 2.01 of the Agreement. Besides, both terms had the same legal consequences. There was therefore effectively no change of theory on appeal. At any rate, ITM failed to show to this Court a disparity between IFCs allegations in the trial court and those in the CA. Bare allegations without proof deserve no credence.Review of FactualFindings NecessaryAs to the issue that only questions of law may be raised in a Petition for Review,39the Court has recognized exceptions,40one of which applies to the present case. The assailed Decision was based on a misapprehension of facts,41which particularly related to certain stipulations in the Guarantee Agreement -- stipulations that had not been disputed by the parties. This circumstance compelled the Court to review the Contract firsthand and to make its own findings and conclusions accordingly.WHEREFORE, the Petition is herebyGRANTED, and the assailed Decision and ResolutionMODIFIEDin the sense that Imperial Textile Mills, Inc. is declared a surety to Philippine Polyamide Industrial Corporation. ITM isORDEREDto pay International Finance Corporation the same amounts adjudged against PPIC in the assailed Decision. No costs.SO ORDERED.

G.R. No. 103066 April 25, 1996WILLEX PLASTIC INDUSTRIES, CORPORATION,petitioner,vs.HON. COURT OF APPEALS and INTERNATIONAL CORPORATE BANK,respondents.MENDOZA,J.:pThis is a petition for review oncertiorariof the decision1of the Court of Appeals in C.A.-G.R. CV No. 19094, affirming the decision of the Regional Trial Court of the National Capital Judicial Region, Branch XLV, Manila, which ordered petitioner Willex Plastic Industries Corporation and the Inter-Resin Industrial Corporation, jointly and severally, to pay private respondent International Corporate Bank certain sums of money, and the appellate court's resolution of October 17, 1989 denying petitioner's motion for reconsideration.The facts are as follows:Sometime in 1978, Inter-Resin Industrial Corporation opened a letter of credit with the Manila Banking Corporation. To secure payment of the credit accomodation, Inter-Resin Industrial and the Investment and Underwriting Corporation of the Philippines (IUCP) executed two documents, both entitled "Continuing Surety Agreement" and dated December 1, 1978, whereby they bound themselves solidarily to pay Manilabank "obligations of every kind, on which the [Inter-Resin Industrial] may now be indebted or hereafter become indebted to the [Manilabank]." The two agreements (Exhs. J and K) are the same in all respects, except as to the limit of liability of the surety, the first surety agreement being limited to US$333,830.00, while the second one is limited to US$334,087.00.On April 2, 1979, Inter-Resin Industrial, together with Willex Plastic Industries Corp., executed a "Continuing Guaranty" in favor of IUCP whereby "For and in consideration of the sum or sums obtained and/or to be obtained by Inter-Resin Industrial Corporation" from IUCP, Inter-Resin Industrial and Willex Plastic jointly and severally guaranteed "the prompt and punctual payment at maturity of the NOTE/S issued by the DEBTOR/S . . . to the extent of the aggregate principal sum of FIVE MILLION PESOS (P5,000,000.00) Philippine Currency and such interests, charges and penalties as hereafter may be specified."On January 7, 1981, following demand upon it, IUCP paid to Manilabank the sum of P4,334,280.61 representing Inter-Resin Industrial's outstanding obligation. (Exh. M-1) On February 23 and 24, 1981, Atrium Capital Corp., which in the meantime had succeeded IUCP, demanded from Inter-Resin Industrial and Willex Plastic the payment of what it (IUCP) had paid to Manilabank. As neither one of the sureties paid, Atrium filed this case in the court below against Inter-Resin Industrial and Willex Plastic.On August 11, 1982, Inter-Resin Industrial paid Interbank, which had in turn succeeded Atrium, the sum of P687,600.00 representing the proceeds of its fire insurance policy for the destruction of its properties.In its answer, Inter-Resin Industrial admitted that the "Continuing Guaranty" was intended to secure payment to Atrium of the amount of P4,334,280.61 which the latter had paid to Manilabank. It claimed, however, that it had already fully paid its obligation to Atrium Capital.On the other hand, Willex Plastic denied the material allegations of the complaint and interposed the following Special Affirmative Defenses:(a) Assumingarguendothat main defendant is indebted to plaintiff, the former's liability is extinguished due to the accidental fire that destroyed its premises, which liability is covered by sufficient insurance assigned to plaintiff;(b) Again, assumingarguendo, that the main defendant is indebted to plaintiff, its account is now very much lesser than those stated in the complaint because of some payments made by the former;(c) The complaint states no cause of action against WILLEX;(d) WLLLEX is only a guarantor of the principal obliger, and thus, its liability is only secondary to that of the principal;(e) Plaintiff failed to exhaust the ultimate remedy in pursuing its claim against the principal obliger;(f) Plaintiff has no personality to sue.On April 29, 1986, Interbank was substituted as plaintiff in the action. The case then proceeded to trial.On March 4, 1988, the trial court declared Inter-Resin Industrial to have waived the right to present evidence for its failure to appear at the hearing despite due notice. On the other hand, Willex Plastic rested its case without presenting any evidence. Thereafter Interbank and Willex Plastic submitted their respective memoranda.On April 5, 1988, the trial court rendered judgment, ordering Inter-Resin Industrial and Willex Plastic jointly and severally to pay to Interbank the following amounts:(a) P3, 646,780.61, representing their indebtedness to the plaintiff, with interest of 17%per annumfrom August 11, 1982, when Inter-Resin Industrial paid P687,500.00 to the plaintiff, until full payment of the said amount;(b) Liquidated damages equivalent to 178 of the amount due; and(c) Attorney's fees and expenses of litigation equivalent to 208 of the total amount due.Inter-Resin Industrial and Willex Plastic appealed to the Court of Appeals. Willex Plastic filed its brief, while Inter-Resin Industrial presented a "Motion to Conduct Hearing and to Receive Evidence to Resolve Factual Issues and to Defer Filing of the Appellant's Brief." After its motion was denied, Inter-Resin Industrial did not file its brief anymore.On February 22, 1991, the Court of Appeals rendered a decision affirming the ruling of the trial court.Willex Plastic filed a motion for reconsideration praying that it be allowed to present evidence to show that Inter-Resin Industrial had already paid its obligation to Interbank, but its motion was denied on December 6, 1991:The motion is denied for lack of merit. We denied defendant-appellant Inter-Resin Industrial's motion for reception of evidence because the situation or situations in which we could exercise the power under BP 129 did not exist. Movant here has not presented any argument which would show otherwise.Hence, this petition by Willex Plastic for the review of the decision of February 22, 1991 and the resolution of December 6, 1991 of the Court of Appeals.Petitioner raises a number of issues.[1] The main issue raised is whether under the "Continuing Guaranty" signed on April 2, 1979 petitioner Willex Plastic may be held jointly and severally liable with Inter-Resin Industrial for the amount paid by Interbank to Manilabank.As already stated, the amount had been paid by Interbank's predecessor-in-interest, Atrium Capital, to Manilabank pursuant to the "Continuing Surety Agreements" made on December 1, 1978. In denying liability to Interbank for the amount, Willex Plastic argues that under the "Continuing Guaranty," its liability is for sums obtained by Inter-Resin Industrial from Interbank, not for sums paid by the latter to Manilabank for the account of Inter-Resin Industrial. In support of this contention Willex Plastic cites the following portion of the "Continuing Guaranty":For and in consideration of the sums obtained and/or to be obtained by INTER-RESIN INDUSTRIAL CORPORATION, hereinafter referred to as the DEBTOR/S, from youand/or your principal/s as may be evidenced by promissory note/s, checks, bills receivable/s and/or other evidence/s of indebtedness (hereinafter referred to as the NOTE/S), I/We hereby jointly and severally and unconditionally guarantee unto you and/or your principal/s, successor/s and assigns the prompt and punctual payment at maturity of the NOTE/S issued by the DEBTOR/S in your and/or your principal/s, successor/s and assigns favor to the extent of the aggregate principal sum of FIVE MILLION PESOS (P5,000,000.00), Philippine Currency, and such interests, charges and penalties as may hereinafter be specified.The contention is untenable. What Willex Plastic has overlooked is the fact that evidence aliunde was introduced in the trial court to explain that it was actually to secure payment to Interbank (formerly IUCP) of amounts paid by the latter to Manilabank that the "Continuing Guaranty" was executed. In its complaint below, Interbank's predecessor-in-interest, Atrium Capital, alleged:5. to secure the guarantee made by plaintiff of the credit accommodation granted to defendant IRIC [Inter-Resin Industrial] by Manilabank, the plaintiff required defendant IRIC [Inter-Resin Industrial] to execute a chattel mortgage in its favor and a Continuing Guaranty which was signed by the other defendant WPIC [Willex Plastic].In its answer, Inter-Resin Industrial admitted this allegat