GIL G. CHUA VS. BANK OF COMMERCE
- G.R. Number: G.R. No. 263632
- Promulgated: 2025-01-22
- Ponente: LAZARO-JAVIER, J.
Doctrine
## Facts of the Case In 2009, Interbrand Logistics and Distribution, Inc. (Interbrand) secured a loan of PHP 150,000,000.00 from Bank of Commerce (respondent). To secure this obligation, Continuing Suretyship Agreements (CSAs) were signed by various individuals associated with Interbrand, including Edgar and Doris San Luis, Almer and Jane Caras, Carlos Francisco S. Mijares (collectively, Interbrand et al.), and Gil G. Chua. The CSAs included waivers of notice of acceptance, presentment, demand, protest, and notice of dishonor. Interbrand defaulted on its loan, leading the respondent to file a complaint for sum of money in April 2010. Four years later, the respondent moved to amend its complaint, seeking to include eight new promissory notes which had also matured. Petitioners opposed this, arguing the amended complaint introduced entirely new promissory notes not present in the original complaint. The trial court allowed the amendment. Gil G. Chua denied signing a CSA for Interbrand, asserting he was not an officer or director and never appeared before a notary public for the document. Interbrand et al. claimed the promissory notes were a sham, lacked consideration, or were ultra vires. The trial court initially held only Interbrand and Edgar San Luis liable, absolving Doris San Luis, spouses Caras, Mijares due to lack of prior demand, and Gil G. Chua for lack of proof of his signature and notary appearance. However, upon reconsideration, a different presiding judge modified the decision, holding all petitioners jointly and severally liable. The Court of Appeals affirmed this modified decision. ## Issues 1. Did the Court of Appeals err in upholding the liability of Gil G. Chua as a surety for Interbrand's loans? 2. Did the Court of Appeals err in holding Interbrand et al. jointly and severally liable as sureties, despite their claim that the CSAs were executed before the promissory notes and there was no prior demand? 3. Did the Court err in upholding the award of the full amount prayed for by the respondent, considering the changes in the promissory notes between the original and amended complaints? ## Decision / Rationale **Issue 1:** The Court of Appeals erred in upholding the liability of Gil G. Chua. The Supreme Court found that there existed serious questions regarding the public character and authenticity of the notarized CSA bearing Chua's supposed signature. First, Chua had no connection or involvement with **Interbrand** (neither shareholder, officer, nor director), making his agreement to guarantee its loans illogical and unreasonable. Second, Chua consistently and vigorously denied signing the CSA or appearing before a notary public. The respondent's lone witness could not personally attest to the execution or genuineness of his signature. The notary public or the witnesses mentioned in the document were not presented to refute Chua's claims. The Court cited **Dela Rama v. Papa**, stating that while notarization creates a presumption of regularity, this presumption is not absolute and can be overthrown by clear and convincing evidence of irregularities. The Court also noted the irregularity of Chua's CSA being notarized in Makati City on the same date as the San Luis CSA in Calamba, Laguna, both with the same set of witnesses. Third, the initial trial court judge, **Judge Paras**, had absolved Chua, finding his signature was not duly established and that the respondent's witness confirmed the bank had no signature card on file for Chua. The subsequent reversal by **Judge Orda-Caise** relied solely on the presumption of regularity of notarized documents, failing to address the substantial factual dispute and irregularities presented by Chua. The Court emphasized that this disregard for clear and convincing evidence is unacceptable. **Issue 2:** The Court of Appeals did not err in holding Interbrand et al. jointly and severally liable as sureties. The Court affirmed the liability of **Interbrand et al.**, rejecting…
Keywords
Article 1191 Civil Code, Article 2208 Civil Code, Article 2229 Civil Code, Rule 45 Rules of Court, Rule 10 Section 8 Rules of Court, Continuing Suretyship Agreement, Presumption of Regularity of Notarized Documents, Mutuality of Contracts, Justice delayed is justice denied, Contract of Loan, Suretyship, Collection of Sum of Money, Notarization Irregularities, Promissory Notes, Corporate Loans, Petition for Review on Certiorari, Questions of Law, Questions of Fact, Joint and Several Liability, Solidary Liability