Go Tong Electrical Supply Co v. Bpi Family Savings Bank

PERLAS-BERNABE, J.:

Assailed in this petition for review on certiorari1 are the Decision2 dated February 17, 2009 and the Resolution3 dated April 13, 2009 of the Court of Appeals (CA) in CA-G.R. CV No. 86749 which affirmed the Decision 4 dated September 6, 2005 of the Regional Trial Court of Makati City, Branch 143 (RTC) in Civil Case No. 02-1203, an action for collection of sum of money, rendered in favor of respondent BPI Family Savings Bank, Inc. (respondent). The Facts On October 4, 2002, respondent filed a complaint5against petitioners Go Tong Electrical Supply Co., Inc. (Go Tong Electrical) and its President, George C. Go (Go; collectively petitioners), docketed as Civil Case No. 02-1203, seeking that the latter be held jointly and severally liable to it for the payment of their loan obligation in the aggregate amount of ₱87,086,398.71, inclusive of the principal sum, interests, and penalties as of May 28, 2002, as well as attorney's fees, litigation expenses, and costs of suit.6 As alleged by respondent as early as 1996, Go Tong Electrical had applied for and was granted financial assistance by the then Bank of South East Asia (BSA).

Subsequently, DBS7 Bank of the Philippines, Inc. (DBS) became the successor in interest of BSA. The application for financial assistance was renewed on January 6, 1999 through a Credit Agreement.8 On even date, Go Tong Electrical, represented by Go, among others, obtained a loan from DBS in the principal amount of ₱40,491,051.65, for which Go Tong Electrical executed Promissory Note No. 82-91-00176-79 (PN) for the same amount in favor of DBS, maturing on February 5, 200010 Under the PN's terms, Go Tong Electrical bound itself to pay a default penalty interest at the rate of one percent (1%) per month in addition to the current interest rate,11 as well as attorney's fees equivalent to twenty-five percent (25%) of the amount sought to be recovered.12 As additional security, Go executed a Comprehensive Surety Agreement13 (CSA) covering any and all obligations undertaken by Go Tong Electrical, including the aforesaid loan.14 Upon default of petitioners, DBS - and later, its successor-in-interest, herein respondent15 - demanded payment from petitioners,16 but to no avail,17 hence, the aforesaid complaint.

In their Answer with Counterclaim18 (Answer), petitioners merely stated that they "specifically deny" 19 the allegations under the complaint. Of particular note is their denial of the execution of the loan agreement, the PN, and the CSA "for being self-serving and pure conclusions intended to suit [respondent's] purposes."20 By way of special and affirmative defenses, petitioners argued, among others, that: (a) the real party-in-interest should be DBS and not respondent; (b) no demand was made upon them; and (c) Go cannot be held liable under the CSA since there was supposedly no solidarity of debtors.21 Petitioners further interposed counterclaims for the payment of moral and exemplary damages, as well as litigation and attorney's fees in the total amount of ₱1,250,000.00.22During trial, respondent presented Ricardo 0.

Suñio23 (Suñio ), the Account Officer handling petitioners' loan accounts, as its witness. Sunio attested to the existence of petitioners' loan obligation in favor of respondent, 24 and identified a Statement of Account25 which shows the amount due as of June 16, 2004 as follows: SUMMARY PRINCIPAL ₱40,491,051.65 PAST DUE INTEREST ₱31,437,800.28 PENALTY ₱47,473,042.27