RCBC v.
CA - Insurance Proceeds It is settled that a mortgagor and a mortgagee have
289 SCRA 292 (1998)
Facts:
> GOYU applied for credit facilities and
accommodations with RCBC. After due evaluation, a
credit facility in the amount of P30 million was initially
granted. Upon GOYU's application increased GOYU's
credit facility to P50 million, then to P90 million, and
finally to P117 million
> As security for its credit facilities with RCBC, GOYU
executed two REM and two CM in favor of RCBC, which
were registered with the Registry of Deeds at. Under
each of these four mortgage contracts, GOYU
committed itself to insure the mortgaged property with an
insurance company approved by RCBC, and
subsequently, to endorse and deliver the insurance
policies to RCBC.
> GOYU obtained in its name a total of 10 insurance
policies from MICO. In February 1992, Alchester
Insurance Agency, Inc., the insurance agent where
GOYU obtained the Malayan insurance policies, issued
nine endorsements in favor of RCBC seemingly upon
instructions of GOYU
> On April 27, 1992, one of GOYU's factory buildings in
Valenzuela was gutted by fire. Consequently, GOYU
submitted its claim for indemnity.
> MICO denied the claim on the ground that the
insurance policies were either attached pursuant to writs
of attachments/garnishments issued by various courts or
that the insurance proceeds were also claimed by other
creditors of GOYU alleging better rights to the proceeds
than the insured.
> GOYU filed a complaint for specific performance and
damages. RCBC, one of GOYU's creditors, also filed
with MICO its formal claim over the proceeds of the
insurance policies, but said claims were also denied for
the same reasons that AGCO denied GOYU's claims.
> However, because the endorsements do not bear the
signature of any officer of GOYU, the trial court, as well
as the Court of Appeals, concluded that the
endorsements are defective and held that RCBC has no
right over the insurance proceeds.
Issue:
Whether or not RCBC has a right over the insurance
proceeds.
Held:
RCBC has a right over the insurance proceeds.
separate and distinct insurable interests in the same
mortgaged property, such that each one of them may
insure the same property for his own sole benefit. There
is no question that GOYU could insure the mortgaged
property for its own exclusive benefit. In the present
case, although it appears that GOYU obtained the
subject insurance policies naming itself as the sole
payee, the intentions of the parties as shown by their
contemporaneous acts, must be given due consideration
in order to better serve the interest of justice and equity.
It is to be noted that 9 endorsement documents were
prepared by Alchester in favor of RCBC. The Court is in
a quandary how Alchester could arrive at the idea of
endorsing any specific insurance policy in favor of any
particular beneficiary or payee other than the insured
had not such named payee or beneficiary been
specifically disclosed by the insured itself. It is also
significant that GOYU voluntarily and purposely took the
insurance policies from MICO, a sister company of
RCBC, and not just from any other insurance company.
Alchester would not have found out that the subject
pieces of property were mortgaged to RCBC had not
such information been voluntarily disclosed by GOYU
itself. Had it not been for GOYU, Alchester would not
have known of GOYU's intention of obtaining insurance
coverage in compliance with its undertaking in the
mortgage contracts with RCBC, and verify, Alchester
would not have endorsed the policies to RCBC had it not
been so directed by GOYU.
On equitable principles, particularly on the ground of
estoppel, the Court is constrained to rule in favor of
mortgagor RCBC. RCBC, in good faith, relied upon the
endorsement documents sent to it as this was only
pursuant to the stipulation in the mortgage contracts. We
find such reliance to be justified under the circumstances
of the case. GOYU failed to seasonably repudiate the
authority of the person or persons who prepared such
endorsements. Over and above this, GOYU continued,
in the meantime, to enjoy the benefits of the credit
facilities extended to it by RCBC. After the occurrence of
the loss insured against, it was too late for GOYU to
disown the endorsements for any imagined or contrived
lack of authority of Alchester to prepare and issue said
endorsements. If there had not been actually an implied
ratification of said endorsements by virtue of GOYU's
inaction in this case, GOYU is at the very least estopped
from assailing their operative effects.
To permit GOYU to capitalize on its non-confirmation of
these endorsements while it continued to enjoy the
benefits of the credit facilities of RCBC which believed in
good faith that there was due endorsement pursuant to
their mortgage contracts, is to countenance grave
contravention of public policy, fair dealing, good faith,
and justice. Such an unjust situation, the Court cannot
sanction. Under the peculiar circumstances obtaining in debtor.
this case, the Court is bound to recognize RCBC's right
to the proceeds of the insurance policies if not for the
actual endorsement of the policies, at least on the basis Rule of Law: A creditor may sue any of the joint and
of the equitable principle of estoppel.
several (solidarios) debtors or all of them
simultaneously. The claims instituted against one shall
GOYU cannot seek relief under Section 53 of the
Insurance Code which provides that the proceeds of not be an obstacle for those that may be later presented
insurance shall exclusively apply to the interest of the against the others, as long as it does not appear that the
person in whose name or for whose benefit it is made.
The peculiarity of the circumstances obtaining in the debt has been collected in full.
instant case presents a justification to take exception to
the strict application of said provision, it having been
sufficiently established that it was the intention of the Facts: Lino Dayandante and Hermenegilda Rogero (P)
parties to designate RCBC as the party for whose
benefit the insurance policies were taken out. Consider acknowledged themselves to be indebted to Roman
thus the following:
Jaucian (D) "jointly and severally".
1. It is undisputed that the insured pieces of property
were the subject of mortgage contracts entered into
between RCBC and GOYU in consideration of and for Rogero (P) signed the document in the capacity of surety
securing GOYU's credit facilities from RCBC. The
mortgage contracts contained common provisions for Dayandante, but the instrument showed that both
whereby GOYU, as mortgagor, undertook to have the
mortgaged property properly covered against any loss debtors bound themselves jointly and severally to the
by an insurance company acceptable to RCBC. creditor. There was nothing in the terms of the
2. GOYU voluntarily procured insurance policies to obligation itself to show that the relation between the
cover the mortgaged property from MICO, no less than a
sister company of RCBC and definitely an acceptable two debtors was that of principal and surety.
insurance company to RCBC.
3. Endorsement documents were prepared by
MICO's underwriter, Alchester Insurance Agency, Inc., Rogero (P) sued Jaucian (D) for fraud. But in his answer,
and copies thereof were sent to GOYU, MICO and
Jaucian (D) asked for judgment against the Rogero (P)
RCBC. GOYU did not assail, until of late, the validity of
said endorsements. for the amount due upon the obligation. The court ruled
4. GOYU continued until the occurrence of the fire, to in favor of Jaucian (D).
enjoy the benefits of the credit facilities extended by
RCBC which was conditioned upon the endorsement of
the insurance policies to be taken by GOYU to cover the
While the case was pending, Rogero (P) died and her
mortgaged properties.
estate was substituted as plaintiff. Meanwhile, the
Jaucian vs. Querol
Supreme Court ruled that the document was valid and
Creditor (D) vs. Estate of "solidary" debtor (P)
GR L-11307, October 5, 1918 Rogero (P) was a surety of the debtor.

Jaucian (D) filed a claim against the estate of Rogero (P).

Summary: A surety signed a debt instrument binding
Francisco Querol (P), the administrator of Rogero's (P)
herself "jointly and severally" with the debtor. The surety
estate, demanded a judgment from the court of his claim
sued for cancellation of the instrument, but it was ruled
against Dayandante that he is indeed insolvent and that
by the court as valid. When the surety died, the creditor
Jaucian (D) exhausted all means to collect from the
filed a claim with the estate, but was refused because the
principal debtor.
creditor did not exhaust his claim against the principal
Issues: Is the surety solidary liable with the principal
debtor? May the creditor sue a "surety" without
exhausting all means against the primary debtor?
Ruling: Yes. Rogero (P), though a surety for
Dayandante, was nevertheless bound jointly and
severally with him in the obligation.
Article 1822 of the Civil Code provides:
By security a person binds himself to pay or perform for
a third person in case the latter should fail to do so.
Article 1144 of the Civil Code provides:
A creditor may sue any of the joint and several
(solidarios) debtors or all of them simultaneously. The
claims instituted against one shall not be an obstacle for
those that may be later presented against the others, as
long as it does not appear that the debt has been
collected in full.
Rogero (P) was solidary liable for the full amount of the
obligation without any right to demand the exhaustion of
the property of the principal debtor. Her position so far
as the creditor was concerned was exactly the same as if
she had been the principal debtor.
Quiombing vs. Court of Appeals
Creditor (P) vs. Debtor (D)
GR 93010, 189 SCRA 325
Summary: Spouses Saligo (D) contended that the other
solidary creditor must be included as co-plaintiff being
an indispensable party to the claim.
Rule of Law: Either one of the solidary creditors my
file a claim against the debtor.
Facts: Spouses Saligo (D) contracted Quiombing (P)
and his co-creditor Bischoco to construct a house for
them. The Construction and Service Agreement between
the parties stated that the creditors Quiombing (P) and
Bischoco "jointly and severally" bound themselves to
construct a house for the debtors. Upon completion,
Quiombing (P) was paid partially, but was unable to
collect the balance after repeated demands. Quiombing
(P) alone filed for recovery of the balance plus charges
and interests.
Issues: (1) May one of the two solidary creditors sue
by himself alone for the recovery of amounts due to
both of them without joining the other creditor as a co-
plaintiff?
(2) In such a case, is the defendant entitled to the
dismissal of the complaint on the ground of non-joinder
of the second creditor as an indispensable part? (3) More
to the point, is the second solidary creditor an
indispensable party?
Ruling: Yes. The question of who should sue the private
respondents was a personal issue between creditors
Quiombing and Biscocho. It did not matter who as
between them filed the complaint because the private
respondents were liable to either of the two as a solidary
creditor for the full amount of the debt. Full satisfaction
of a judgment obtained against them by Quiombing
would discharge their obligation to Biscocho, and vice
versa; hence, it was not necessary for both creditors
Quiombing and Biscocho to file the complaint. Inclusion
of Biscocho as a co-plaintiff when Quiombing was
competent to sue by himself alone, would be a useless
formality.
Necessary parties are those whose presence is
necessary to adjudicate the whole controversy, but
whose interests are so far separable that a final decree
can be made in their absence without affecting them.
 (Necessary parties are now called proper parties.)
Wyoga Gas and Oil Corp. v. Schrack, I Fed. Rules
Service, 292.
Where the obligation of the parties is solidary, either one
of the parties is indispensable, and the other is not even
necessary (now proper) because complete relief may be
obtained from either.
Feria, Civil Procedure, 1969, p. 153.
A joint obligation is one in which each of the debtors
is liable only for a proportionate part of the debt, and
each creditor is entitled only to a proportionate part of
the credit.
A solidary obligation is one in which each debtor is
liable for the entire obligation, and each creditor is
entitled to demand the whole obligation.
Hence, in the former, each creditor can recover only his
share of the obligation, and each debtor can be made to
pay only his part; whereas, in the latter, each creditor
may enforce the entire obligation, and each debtor may
be obliged to pay it in full.
Tolentino, Civil Code of the Philippines, Vol. IV. 1985,
p. 218.
Makati Developmental Corp vs.
Empire Insurance Corp
Makati Developmental Corp
vs. Empire Insurance Corp
GR No. L-21780
FACTS:
1. MAKATI SOLD TO Rodolfo P. Andal a lot
1. SPECIAL CONDITION:
i. VENDEE/S shall commence the construction and
complete at least 50% of his/her/their/its
residence on the property within two (2) years
from March 31, 1959 to the satisfaction of the
VENDOR
ii. Failure to do so, the bond which the VENDEE/S
has delivered to the VENDOR in the sum of
P11,123.00 and evidenced by a cash bond
receipt dated April 10, 1959 will be forfeited in
favor of the VENDOR by the mere fact of failure
of the VENDEE/S to comply with this special
condition."
2. ANDAL GAVE A SURETY BOND, he
as principal, and the Empire Insurance
Company, as surety, jointly and severally,
undertook to pay the Makati Development
Corporation the sum of P12,000 in case Andal
failed to comply with his obligation under the
deed of sale.
i. Did not build his house; instead he sold the lot to
Juan Carlos
ii. Neither built a house on the lot within the
stipulated period
iii. MAKATI sent a notice of claim to the Empire
Insurance Co. advising it of Andal's failure to
comply with his undertaking.
iv. Demand for the payment of P12,000 was refused
2. MAKATI FILED COMPLAINT against the
Empire.
1. EMPIRE filed answer with a third-
party complaint against Andal.
i. To order Andal to pay the Empire Insurance Co.
whatever amount it maybe ordered to pay the
Makati Development Corporation, plus interest
at 12%, from the date of the filing of the
complaint until said amount was fully
reimbursed, and attorney's fees.
ii. Andal admitted the execution of the bond but
alleged that the "special condition" in the deed
of sale was contrary to law, morals and public
policy.
1. He averred that Juan Carlos had started
construction of a house on the lot.
3. LOWER COURT SENTENCED Empire to
pay MAKATI P1,500, with interest at the rate of
12% from the time of the filing of the complaint
until the amount was fully paid, and to pay
attorney's fees in the amount of P500, and the
proportionate part of the costs.
1. Andal should in turn pay EMPIRE
P1,500 with interest at 12% from the time of
the filing of the complaint to the time of
payment and to pay attorney's fees in the sum
of P500 and proportionate part of the costs.
2. MAKATI APPEALED.
4. COURT REDUSED ANDALS LIABILITY
BECAUSE THERE WAS ONLY REALLY A LITTLE
DELAY.
1 There was indication of owner's desire to
construct his house with the least possible
delay.
2 MAKATI argues that Andal became liable for the
full amount of his bond upon his failure to build
 a house within the two-year period which
expired on March 31, 1961
3 Trial court has no authority to reduce Andal's
liability on the basis of Carlos' construction of a
house a month after the stipulated period
because there was no contract between Carlos
and the Makati Development Corporation.
ISSUE:
WON court erred in mitigating the obligors
liability considering obligor failed to commit
obligation within stipulated time.
WON 3rd partys commencement of stipulated
condition can be counted in commitment of the
contract.
HELD:
Accordingly, the decision appealed from is
affirmed, at appellant's cost.
1. SPECIAL CONDITION = OBLIGATION
2. MITIGATION OF OBLIGORS LIABILITY IS
ALLOWED:
1. ART 1229 of the Civil Code states:
i. The judge shall equitably reduce the penalty
when the principal obligation has been partly
or irregularly complied with by the debtor. Even
if there has been no performance, the penalty
may also be reduced by the courts if it is
iniquitous or unconscionable.
3. JUAN CARLOS FINISHED 50% OF HOUSE
ONE MONTH AFTER EXPIRATION OF
STIPULATED PERIOD.
1. The penal clause in this case was
inserted not to indemnify for any damage but
rather to compel performance of the so-called
"special condition" and encourage home
building among lot owners in the Urdaneta
Village.
4. ON CARLOS NO CONTRACTUAL
RELATION WITH MAKATI:
1 Indeed the stipulation in this case to
commence the construction and complete at
least 50 per cent of the vendee's house within
two years cannot be construed as imposing a
strictly personal obligation on Andal BECAUSE
IT WOULD ANDALS RIGHT TO DISPOSE THE
LOT.
2 There is nothing in the deed of sale restricting
Andal's right to sell the lot at least within the
two-year period.
3 Such limitation should be expressed if ever and
not left to mere inference.
EMILIO TAN vs. COURT
OF APPEALS
EMILIO TAN vs. COURT OF APPEALS G.R. No.
48049, 29 June 1989
FACTS: Tan Lee Siong, father of herein petitioners,
applied for life insurance in the amount of P80,000.00
with respondent company Philippine American Life
Insurance Company. Said application was approved and
a corresponding policy was issued effective November
5, 1973, with petitioners as the beneficiaries. On April
26, 1975, Tan Lee Siong died of hepatoma. Hence,
petitioners filed with respondent company their claim for
the proceeds of the life insurance policy. However, the
insurance company denied the said claim and rescinded
the policy by reason of the alleged misrepresentation
and concealment of material facts made by the
deceased Tan Lee Siong in his application for insurance.
The premiums paid on the policy were thereupon
refunded. The petitioners contend that the respondent
company no longer had the right to rescind the contract
of insurance as rescission must allegedly be done during
the lifetime of the insured within two years and prior to
the commencement of action.
ISSUE: Whether or not the insurance company has the
right to rescind the contract of insurance despite the
presence of an incontestability clause
HELD:
YES. The so-called incontestability clause precludes
the insurer from raising the defenses of false
representations or concealment of material facts insofar
as health and previous diseases are concerned if the
insurance has been in force for at least two years during
the insureds lifetime. The phrase during the lifetime
found in Section 48 of the Insurance Law simply means
that the policy is no longer considered in force after the
insured has died. The key phrase in the second
paragraph of Section 48 is for a period of two years.
The policy was issued on November 6, 1973 and the
insured died on April 26, 1975. The policy was thus in
force for a period of only one year and five months.
Considering that the insured died before the two-year
period has lapsed, respondent company is not,
therefore, barred from proving that the policy is void ab
initio by reason of the insureds fraudulent concealment
or misrepresentation. Moreover, respondent company
rescinded the contract of insurance and refunded the
premiums paid on November 11, 1975, previous to the
commencement of this action on November 27, 1975.
WHEREFORE, the petition is hereby DENIED for lack of
merit. The questioned decision of the Court of Appeals is
AFFIRMED.

LAFARGE CEMENT PHILIPPINES, INC vs
CONTINENTAL CEMENT CORPORATION (CCC)
G.R. No. 155173, November 23, 2004
PANGANIBAN, J.:
FACTS:
On August 11, 1998, a letter of intent was executed
by both parties, Lafarge and CCC. Lafarge agreed to
purchase the cement business of CCC. On October
21, 1998, they entered into a Sale and Purchase
Agreement (SPA). The petiitioners, at the time of
such transactions were aware of the pending case of
CCC with the Supreme Court entitled Asset
Privatization Trust (APT) v. Court of Appeals and
Continental Cement Corporation. In anticipation of
the liability that the High Tribunal might adjudge
against CCC, the parties, under Clause 2 (c) of the
SPA, allegedly agreed to retain from the purchase
price a portion of the contract price in the amount of
P117,020,846.84 -- the equivalent of US$2,799,140.
This amount was to be deposited in an interest-
bearing account in the First National City Bank of
New York (Citibank) for payment to APT.However,
petitioners allegedly refused to apply the sum to the
payment to APT, after the finality of the judgment in
the case of CCC. Fearful that nonpayment to APT
would result in the foreclosure, of several
properties, CCC filed before the RTC a Complaint
with Application for Preliminary Attachment" against
petitioners. The Complaint prayed, that petitioners
be directed to pay the "APT Retained Amount"
referred to in Clause 2 (c) of the SPA.
Petitioners moved to dismiss the Complaint on the
ground that it violated the prohibition on forum-
shopping. Respondent CCC had allegedly made the
same claim it was raising in another action, which
involved the same parties and which was filed earlier
before the International Chamber of Commerce.
After the trial court denied the Motion to Dismiss in
its November 14, 2000 Order, petitioners elevated the
matter before the Court of Appeals .
In the meantime, to avoid being in default and
without prejudice to the outcome of their appeal,
petitioners filed their Answer and Compulsory
Counterclaims ad Cautelam before the trial court. In
their Answer, they denied the allegations in the
Complaint. They prayed -- by way of compulsory
counterclaims against Respondent CCC, its majority
stockholder and president Gregory T. Lim, and its
corporate secretary Anthony A. Mariano -- for the
sums of (a) P2,700,000 each as actual damages, (b)
P100,000,000 each as exemplary damages, (c)
P100,000,000 each as moral damages, and (d)
P5,000,000 each as attorney's fees plus costs of suit.
Petitioners alleged that CCC, through Lim and
Mariano, had filed the "baseless" Complaint
andprocured the Writ of Attachment in bad faith.
Relying on this Court's pronouncement in Sapugay
v. CA,5 petitioners prayed that both Lim and Mariano
be held "jointly and solidarily" liable with
Respondent CCC.On behalf of Lim and Mariano who
had yet to file any responsive pleading, CCC moved
to dismiss petitioners' compulsory counterclaims on
grounds that essentially constituted the very issues
for resolution in the instant Petition.
RTC ruled that the counterclaims of the petitioners
against Lim and Mariano were not compulsory, that
the ruling in Sapugay was not applicable and that
the petitioners answer with counterclaims violated
the procedural rules on joinder of actions.
ISSUES:
1. Whether or not the counterclaims of the
petitioners against Lim and Mariano were not
compulsory.
2. Whether or not the ruling in Sapugay was not
applicable.
3. Whether or not the petitioners answer with
counterclaims violated the procedural rules
on joinder of actions.
4. Whether or not CCC has the personality to
move to dismiss the compulsory counter
claims on behalf of Lim and Mariano.
HELD:
1st issue: Petitioners counterclaims Compulsory.
A counterclaim may either be permissive or compulsory.
It is permissive "if it does not arise out of or is not
necessarily connected with the subject matter of the
opposing party's claim." A permissive counterclaim is
essentially an independent claim that may be filed
separately in another case.A counterclaim is compulsory
when its object "arises out of or is necessarily connected
with the transaction or occurrence constituting the
subject matter of the opposing party's claim and does
not require for its adjudication the presence of third
parties of whom the court cannot acquire jurisdiction."
Unlike permissive counterclaims, compulsory
counterclaims should be set up in the same action;
otherwise, they would be barred forever.
NAMARCO v. Federation of United Namarco
Distributors:
Criteria to determine whether a counterclaim is
compulsory or permissive:
1) Are issues of fact and law raised by the claim and by
the counterclaim largely the same?
2) Would res judicata bar a subsequent suit on
defendant's claim, absent the compulsory counterclaim
rule?
3) Will substantially the same evidence support or refute
plaintiff's claim as well as defendant's counterclaim?
4) Is there any logical relation between the claim and
the counterclaim?
A positive answer to all four questions would indicate
that the counterclaim is compulsory.
Quintanilla v. CA:
"Compelling test of compulsoriness" characterizes a
counterclaim as compulsory if there should exist a
"logical relationship" between the main claim and the
counterclaim. There exists such a relationship when
conducting separate trials of the respective claims of the
parties would entail substantial duplication of time and
effort by the parties and the court; when the multiple
claims involve the same factual and legal issues; or
when the claims are offshoots of the same basic
controversy between the parties.
Tiu Po vs Bautista
"Compensatory, moral and exemplary damages,
allegedly suffered by the creditor in consequence of the
debtor's action, are also compulsory counterclaim barred
by the dismissal of the debtor's action. They cannot be
claimed in a subsequent action by the creditor against
the debtor."
The allegations of the petitioner show that its
conterclaims for damages were the result of
respondents (Lim and Mariano) act of filing the
Complaint and securing the Writ of attachment in
bad faith. Furthermore, using the "compelling test of
compulsoriness," we find that, clearly, the recovery
of petitioners' counterclaims is contingent upon the
case filed by respondents; thus, conducting
separate trials thereon will result in a substantial
duplication of the time and effort of the court and the
parties.Since the counterclaim for damages is
compulsory, it must be set up in the same action.
2nd issue: Sapugay vs CA is applicable to the case at
bar.
The inclusion of Lim and Mariano is based on the
allegations of fraud and bad faith on the part of the
corporate officer or stockholder. These allegations
may warrant the piercing of the veil of corporate
fiction, so that the said individual may not seek
refuge therein, but may be held individually and
personally
Sapugay vs CA
Among the issues raised in Sapugay was whether
Cardenas, who was not a party to the original action,
might nevertheless be impleaded in the counterclaim.
We disposed of this issue as follows:
"A counterclaim is defined as any claim for money or
other relief which a defending party may have against an
opposing party. However, the general rule that a
defendant cannot by a counterclaim bring into the action
any claim against persons other than the plaintiff admits
of an exception under Section 14, Rule 6 which provides
that 'when the presence of parties other than those to
the original action is required for the granting of
complete relief in the determination of a counterclaim or
cross-claim, the court shall order them to be brought in
as defendants, if jurisdiction over them can be obtained.'
The inclusion, therefore, of Cardenas in petitioners'
counterclaim is sanctioned by the rules."
3rd issue: The the procedural rules on joinder of
actions were not violated.
In joining Lim and Mariano in the compulsory
counterclaim, petitioners are being consistent with the
solidary nature of the liability alleged therein. The
procedural rules are founded on practicality and
convenience. They are meant to discourage duplicity
and multiplicity of suits.
4th issue: CCC has no personality to move to
dismiss the compulsory counter claims on behalf of
Lim and Mariano.
A perusal of CCCs Motion to Dismiss the counterclaims
shows that Respondent CCC filed it on behalf of Co-
respondents Lim and Mariano; it did not pray that the
counterclaim against it be dismissed. While Respondent
CCC can move to dismiss the counterclaims against it
by raising grounds that pertain to individual defendants
Lim and Mariano, it lacks the requisite authority to do so.
A corporation has a legal personality entirely separate
and distinct from that of its officers and cannot act for
and on their behalf, without being so authorized. Thus,
unless expressly adopted by Lim and Mariano, the
Motion to Dismiss the compulsory counterclaim filed by
Respondent CCC has no force and effect as to them.
MENCHAVEZ v. TEVES, 26 January 2005
FACTS: Menchavez and Teves entered into a
Contract of Lease for an area covered for a
fishpond application for a period of five years.
During this period, Cebu RTC sheriffs
demolished the fishpond dikes constructed by
Teves. As a consequence, Teves filed for
damages with application for preliminary Where both are at fault, no one can found a
attachment against Menchavez. In his claim.
Complaint, he alleged that the lessors had
violated their Contract of Lease, specifically the Laguesma, AbrilliusRaffy C.
provision on peaceful and adequate enjoyment
of the property for the entire duration of the
Contract.Respondent further asserted that the
lessors had withheld from him the findings of
the trial court in Civil Case No. 510-T, entitled Art. 1207, Civil Code of the Philippines
"Eufracia Colongan and Paulino Pamplona v.
Juan Menchavez Sr. and Sevillana S. The concurrence of two or more creditors or
Menchavez." In that case involving the same of two or more debtors in one and the same
property, subject of the lease, the Menchavez
spouses were ordered to remove the dikes obligation does not imply that each one of the
illegally constructed and to pay damages and former has a right to demand, or that each
attorney's fees.
one of the latter is bound to render, entire
ISSUE: Whether or not Menchavez is liable for compliance with the prestation. There is a
Teves for the sheriffs act of demolishing the
constructed dikes. solidary liability only when the obligation
expressly so states, or when the law or the
HELD: No. A void contract is deemed legally
nature of the obligation requires solidarity.
non-existent. It produces no legal effect. As a
general rule, courts leave parties to such a
contract as they are, because they are in pari
delicto or equally at fault. Neither party is
entitled to legal protection. Salvador P. Escaoand Mario M. Silos
vs. Rafael Ortigas, Jr.
RATIO: The defendants ought to have known
that they cannot lease what does not belong to G. R. No. 151953, June 29, 2007
them for as a matter of fact, they themselves
are still applying for a lease of the same
property under litigation from the government. Facts:
On the other hand, Florentino Teves, being fully
aware that petitioners were not yet the owners, On April 28, 1980, Private
had assumed the risks and under the principle
of VOLENTI NON FIT INJURIA NEQUES Development Corporation of the Philippines
DOLUS He who voluntarily assumes a risk, (PDCP) entered into a loanagreement with
does not suffer damages thereby. As a
consequence, when Teves leased the fishpond Falcon Minerals, Inc. (Falcon) amounting to
area from petitioners who were mere $320,000.00 subject to terms and conditions
holders or possessors thereof, he took the risk
that it may turn out later that his application for On the same day, three (3)
lease may not be approved. Unfortunately
however, even granting that the lease of stockholder-officers of Falcon: Ortigas Jr.,
petitioners and their application in 1972 were to George A. Scholey, and George T.
be approved, still they could not sublease the
same. In view therefore of these, the parties Scholeyexecuted an Assumption of Solidary
must be left in the same situation in which the Liability to assume in their individual
court finds them, under the principle IN PARI
DELICTO NON ORITOR ACTIO, meaning: capacity, solidary liability with Falcon for
due and punctual payment of the loan Issue:
contracted by Falcon with PDCP. Two (2)
Whether the obligation to repay is solidary,
separate guaranties were executed to
as contended by respondent and the lower
guarantee payment of the same loan by other
courts, ormerely joint as argued by
stockholdersand officers of Falcon, acting in
petitioners.
their personal and individual capacities.
Ruling:
One guaranty was executed byEscao,
Silos, Silverio, Inductivo and Rodriguez. Two The obligation to repay is only jointly
years later, an agreement was developed to as declared by the Court. In case there is a
cede control of Falcon to Escao, Silos and concurrence of two or more creditors or of
Matti. Contractswere executed whereby two or more debtors in one and thesame
Ortigas, George A. Scholey, Inductivo and the obligation, Article 1207 of the Civil Code
heirs of then already deceasedGeorge T. states that among them, there is a solidary
Scholey assigned their shares of stock in liability onlywhen the obligation expressly so
Falcon to Escao, Silos and Matti. states, or when the law or the nature of the
obligation requiressolidarity. Article 1210
An Undertakingdated June 11, 1982
supplies further caution against the broad
was executed by the concerned parties,
interpretation of solidarity by providing:The
namely: with Escao, Silos and Matti as
indivisibility of an obligation does not
sureties and Ortigas, Inductivo and
necessarily give rise to solidarity. Nor does
Scholeys as obligors. Falcon eventually
solidarity of itself imply indivisibility. These
availed of the sum of $178,655.59 from the
Civil Code provisions establish that in case of
credit line extended by PDCP. It would
concurrence of two or morecreditors or of two
alsoexecute a Deed of Chattel Mortgage over
or more debtors in one and the same
its personal properties to further secure the
obligation, and in the absence of express
loan. However, Falcon subsequently
andindubitable terms characterizing the
defaulted in its payments. After PDCP
obligation as solidary, the presumption is
foreclosed on the chattel mortgage,
that the obligation is only joint. It thus
thereremained a subsisting deficiency of Php
becomes incumbent upon the party alleging
5,031,004.07 which falcon did not satisfy
that the obligation is indeed solidary in
despite demands.
characterto prove such fact with a
preponderance of evidence.Note that Article
2047 itself specifically calls for the
application of the provisions on joint
andsolidary obligations to suretyship
contracts. Article 1217 of the Civil Code thus the other rights, actions and benefits which
comes into play,recognizing the right of pertainto the surety by reason of the
reimbursement from a co-debtor (the subsidiary obligation assumed by the surety.
principal debtor, in case of suretyship)
infavor of the one who paid (i.e. the surety).
Decision:
However, a significant distinction still
lies between a joint andseveral debtor, on one Petitioners and Matti are jointly liable
hand, and a surety on the other. Solidarity to Ortigas, Jr. in the amount of P1.3M; Legal
signifies that the creditor can compelany one interest of 12% per annum on P 1.3M
of the joint and several debtors or the surety computed from March 14, 1994. Assailed
alone to answer for the entirety of the rulings are affirmed. Costsagainst
principal debt. The difference lies in the petitioners.
respective faculties of the joint and several
debtor and the surety to seekreimbursement
for the sums they paid out to the creditor. In G.R. No. 171660 October 17, 2011

the case of joint and several debtors, CONTINENTAL CEMENT

Article1217 makes plain that the solidary CORPORATION Petitioner,
debtor who effected the payment to the vs.
ASEA BROWN BOVERI, INC., BBC BROWN
creditor may claim from hisco-debtorsonly
BOVERI, CORP., AND TORD B.
the share which corresponds to each, with ERIKSON,** Respondents.
the interest for the payment alreadymade.
Such solidary debtor will not be able to
recover from the co-debtors the full amount DECISION
already paid tothe creditor, because the right
to recovery extends only to the proportional
share of the other co-debtors,and not as to DEL CASTILLO, J.:
the particular proportional share of the
solidary debtor who already paid. In
contrast, even asthe surety is solidarily FACTS:
bound with the principal debtor to the
Sometime in July 1990, petitioner Continental
creditor, the surety who does pay the Cement Corporation (CCC), a corporation
creditorhas the right to recover the full engaged in the business of producing
amount paid, and not just any proportional cement, obtained the services of
respondents Asea Brown Boveri, Inc. (ABB)
share, from the principal debtoror debtors.
and BBC Brown Boveri, Corp. to repair its 160
Such right to full reimbursement falls within KW Kiln DC Drive Motor (Kiln Drive Motor).
 On October 23, 1991, due to the repeated
failure of respondents to repair the Kiln Drive
Motor, petitioner filed with Branch 101 of the
Regional Trial Court (RTC) of Quezon City a
Complaint for sum of money and damages,
docketed as Civil Case No. Q-91-10419,
against respondent corporations and
respondent Tord B. Eriksson (Eriksson), Vice-
President of the Service Division of the
respondent ABB. Petitioner alleged that:
On July 11, 1990, the plaintiff delivered
the 160 KW Kiln DC Drive Motor to the
defendants to be repaired under PO No.
17136-17137,
plaintiff suffered production losses for
five days at the rate of 1,040 MTD daily.
The defendants were given a third
chance to repair the 160 KW Kiln DC
Drive Motor.1avvphi1 On March 13,
1991, the motor was installed and
tested. Again, the test failed. The plaintiff
resumed operation on March 15, 1991.
The plaintiff sustained production losses
at the rate of 1,040 MTD for two days.

The defendant, Tord B. Eriksson, was As a consequence of the failure of the

personally directing the repair of the defendants to comply with their
said Kiln Drive Motor. He has direction contractual obligation to repair the 160
and control of the business of the KW Kiln DC Drive Motor, the plaintiff
defendant corporations. Apparently, the sustained the following losses:
defendant Asea Brown Boveri, Inc. has
no separate personality because of the (a) Production and opportunity
4,000 shares of stock, 3996 shares losses - P10,600,000.00
were subscribed by Honorio Poblador,
Jr. The four other stockholders
subscribed for one share of stock each
This amount represents only
only.
about 25% of the production
losses at the rate of P72.00
After the first repair by the defendants,
per bag of cement.
the 160 KW Kiln Drive Motor was
installed for testing on October 3, 1990.
On October 4, 1990 the test failed. The
plaintiff removed the DC Drive Motor (b) Labor Cost and Rental of
and replaced it with its old motor. It was Crane - 26,965.78
only on October 9, 1990 that the plaintiff
resumed operation. The plaintiff lost
1,040 MTD per day from October 5 to
October 9, 1990. (c) Penalties (at P987.25 a day)
for failure to deliver the motor
On November 14, 1990, after the from
defendants had undertaken the second
repair of the motor in question, it was Aug. 29, 1990 to July 31,
installed in the kiln. The test failed again. 1991. - 331,716.00
The plaintiff resumed operation with its
old motor on November 19, 1990. The
 (d) Cost of money interest of the
P987.25 a day from July 18, 1990
to
April 5, 1991 at 34% for
261 days - 24,335.59
Total Damages 10,983,017.42
The plaintiff has made several demands
on the defendants for the payment of
the above-enumerated damages, but
the latter refused to do so without valid
justification.
10. The plaintiff was constrained to file
this action and has undertaken to pay its
counsel Twenty Percentum (20%) of the
amount sought to be recovered as
attorneys fees.
ISSUES:
Hence, the present recourse where petitioner
interposes the following issues:
1. Whether the [CA] gravely erred in
applying the terms of the "General
Conditions" of Purchase Orders Nos.
17136 and 17137 to exculpate the
respondents from liability in this case.
2. Whether the [CA] seriously erred in
applying the concepts of implied
warranty and warranty against hidden
defects of the New Civil Code in order
to exculpate the respondents from its
contractual obligation.
Ruling of the Regional Trial Court
On August 30, 1995, the RTC rendered a
Decision in favor of petitioner. The RTC
rejected the defense of limited liability
interposed by respondents since they failed to
prove that petitioner received a copy of the
General Conditions.16 Consequently, the RTC
granted petitioners claims for production loss,
labor cost and rental of crane, and attorneys
fees.17 Thus:
WHEREFORE, premises above considered,
finding the complaint substantiated by plaintiff,
judgment is hereby rendered in favor of plaintiff
and against defendants, hereby ordering the
latter to pay jointly and severally the former, the
following sums:
P10,600,00.00 for loss of production;
P 26,965.78 labor cost and rental of crane;
P 100,000.00 attorneys fees and cost.
SO ORDERED.
Ruling of the Court of Appeals
On appeal, the CA reversed the ruling of the
RTC. The CA applied the exculpatory clause in
the General Conditions and ruled that there is
no implied warranty on repair work; thus, the
repairman cannot be made to pay for loss of
production as a result of the unsuccessful
repair. The fallo of the CA Decision reads:
WHEREFORE, premises considered, the
assailed August 30, 1995 Decision of the
Regional Trial Court of Quezon City, Branch
101 is hereby REVERSED and SET
ASIDE. The October 23, 1991 Complaint is
hereby DISMISSED.
SO ORDERED.
Our Ruling (Supreme Court)
The petition has merit.
Petitioner and respondent ABB entered into a
contract for the repair of petitioners Kiln Drive
Motor, evidenced by Purchase Order Nos.
17136-37,33 with the following terms and
conditions:
a) Total Price: P197,450.00
b) Delivery Date: August 29, 1990 or six
(6) weeks from receipt of order and
down payment34
c) Penalty: One half of one percent of
the total cost or Nine Hundred Eighty
Seven Pesos and Twenty five centavos
(P987.25) per day of delay.
WHEREFORE, the petition is hereby
GRANTED. The assailed Decision dated
August 25, 2005 and the Resolution dated
February 16, 2006 of the Court of Appeals in
CA-G.R. CV No. 58551 are hereby
REVERSED and SET ASIDE. Respondent
ABB is ORDERED to pay petitioner the amount
of P129,329.75, with interest at 6% per annum
to be computed from the date of the filing of the
complaint until finality of this Decision and 12%
per annum thereafter until full payment.
SO ORDERED.
INCHAUSTI v YULO
GR No. 7721
Plaintiff-Appellant: Inchausti & Co
Defendant-Appellee: Gregorio Yulo
Ponente:Arrelano, J.
March 25, 1914
TOPIC Solidary Obligations Kinds As to
uniformity Varied/Non-uniform
Article 1211: Solidarity may exist although the creditors
and the debtors may not be bound in the same manner
and by the same periods and conditions.
DOCTRINE
"When the obligation is constituted as a conjoint and
solidary obligation each one of the debtors is bound to
perform in full the undertaking which is the subject
matter of such obligation."(Old Civil Code, articles 1137
and 1144)
Article 1148 of the Old Civil Code."The solidary
debtor may utilize against the claims of the creditor all
the defences arising from the nature of the obligation
and those which are personal to him. Those personally
pertaining to the others may be employed by him only
with regard to the share of the debt f or which the latter
may be liable."
SHORT VERSION
Teodoro Yulo has been borrowing money from Inchausti
& Co under specific conditions for the exploitation of
his hacienda. When he and his wife died, his sons
continued their account with plaintiff. Gregorio Yulo
and his brothers then had a series of letters, transactions
documents, and instruments with the plaintiff admitting
their indebtedness and expressing their conformity
regarding the amount of their debts and their balance.
They obligated themselves to play but failed to pay right
at the first instalment. An action was brought against
Gregorio Yulo. However, another notarial instrument
was executed by the Yulos in recognition of the debt
andthe obligation of payment, and then asking plaintiff
to include in the filed suit Pedro Yulo, and in that case,
theyd procure all means for the judgment to be in
favour of the plaintiff. However, the court ruled in
favour of Gregorio instead.
Court reversed the judgment and held that plaintiff can
sue Gregorio Yulo alone since the Yulos obligated
themselves in solidum.
FACTS
Teodoro Yulo, a property owner of Iloilo, for the
exploitation and cultivation of hishaciendas in Negros
Occidental, had been borrowingmoney from Inchausti
& Co under specific conditions.
April 9, 1903: Teodoro Yulo died testate and for the
execution of the provisionsof his will, he had appointed
as administrators his widow and five of his sons,
including Gregorio Yulo.
Gregoria Regalado the wifedied the following year on
October 22nd. The remaining were the following
legitimate children: Pedro, Francisco, Teodoro
(incompetent), Manuel, Gregorio,Mariano, Carmen,
Concepcin (minor), and Jose (minor)Yulo. The
children preserved the same relations under the name of
Hijos de T.Yulo continuing their current account with
Inchausti & Co until said balanceamounted to P200,000
upon which the creditor firm tried to obtain security for
thepayment of the money.
First June 26, 1908:Gregorio Yulo, for himself and in
representation of his brothers executed a notarial
document admitting their indebtedness to Inchausti
& Co. in the sum ofP203,221.27 and, in order to secure
the same with interest thereon at 10% perannum, they
especially mortgaged an undivided six-ninth of their 38
ruralproperties, their remaining urban properties,lorchas,
and family credits which werelisted.
Second January 11, 1909: Gregorio Yulo
inrepresentation of Hijos de T. Yulo answereda letter
of the firm of Inchausti & Co saying that they received
the abstract of their current account, expressing their
conformity with the balance of P271,863.12. This was
reduced to P253,445.42 on July 17,1909, to which the
brothers expressed conformity. Regardingthis
conformity a new document evidencing the mortgage
credit was formalized.
Third August 12, 1909: Gregorio Yulo, for himself
and in representation of his brotherManuel Yulo, and in
their own behalf Pedro, Francisco, Carmen, and
Concepcion ratified all the contents of theprior
document of June 26, 1908, severally and jointly
acknowledged and admittedtheir indebtedness to
Inchausti & Co for the net amount of
P253,445.42which they obligated themselves to pay,
with interest at 10% per annum, in fiveinstallments at the
rate of P50,000, except the last, this being
P53,445.42,beginning June 30, 1910, continuing
successively on the 30th of each June until thelast
payment on June 30, 1914.
Among other clauses, they expressly stipulated the
following:
- The default in payment of any of the installments or
the noncompliance of anyof the other obligations will
result in the maturity of all the said instalmentsand
Inchausti & Co. may exercise at once all the rights
and actions in order toobtain the immediate and total
payment of our debt
- All the obligations will be understood as having
been contracted in solidum
- The instrument shall be confirmed and ratified in all
its parts, within the presentweek, by their brother
Mariano, otherwiseit will not be binding on
Inchausti & Co. who can make use of their rights
todemand and obtain the immediate payment of their
credit without any furtherextension or delay.
Fourth This instrument was neither ratified nor
confirmed by Mariano Yulo.
FifthThe Yulos did not pay the first installment of the
obligation.
Sixth March 27, 1911: Inchausti & Co. brought an
ordinary action against Gregorio Yulo for the payment
of the balance of P253,445.42 with interestat 10% per
annum, on that date aggregating to P42,944.76.
Seventh May 12, 1911: Francisco, Manuel, and
Carmen Yulo executed infavor of Inchausti & Co.
another notarial instrument in recognition of the debt
andthe obligation of payment.1Stipulated in addition
was that Inchausti & Co. should include in their suit
brought against Gregorio Yulo, his brother and joint
co-obligee, Pedro Yulo, andthey will procure by all
legal means and in the least time possible a judgment
intheir favor against Gregorio and Pedro.
Eighth July 10, 1911: Gregorio Yulo answered the
complaint and alleged as defenses:
- That an accumulation of interest had taken place and
that compound interestwas asked for in Philippine
currency at par with Mexican;
- That in theinstrument of August 12, 1909, two
conditions were agreed one of which ought tobe
approved by the CFI, and the other ratified and
confirmed by the other brotherMariano Yulo, neither
of which was complied with;
- That with regard to thesame debt claims were
presented before the commissioners in the
specialproceedings over the inheritances of Teodoro
Yulo and Gregoria Regalado, thoughlater they were
dismissed, pending the present suit
- That theinstrument of August 12, 1909, was novated
by that of May 12, 1911, executed byManuel,
Francisco and Carmen Yulo.
The Court decided the case in favor of the defendant
without prejudice tothe plaintiff's bringing within the
proper time another suit for his proportional part of the
joint debt, and that the plaintiff pay the costs.
ISSUES/HELD
(1) WON the plaintiff can sue Gregorio Yulo alone, there
being other obligors - YES
1Debt is reduced forthem to P225,000Interest is likewise
reduced for them to 6% perannum, from March 15, 1911
Installments are increased to 8, the first ofP20,000, beginning
on June 30, 1911, and the rest of P30,000 each on the
samedate of each successive year until the total obligation
shall be finally andsatisfactorily paid on June 30, 1919 (xxx)

(2) WON plaintiff lost this right by the fact of its having
agreed with the otherobligors in the reduction of the
debt, the proroguing of the obligation and theextension
of the time for payment, in accordance with the
instrument of May 12,1911NO
(3) WON the contract with the three obligors
constitutesa novation of that of August12, 1999, entered
into with the six debtors who assumed the payment
ofP253,445.42NO
(3.1) If in the negative, WON it has any effect in the
actionbrought and in this presentsuitYES[Total amount
and amount due and demandable, respectively.]
RATIO
(1) It was stated in the stipulation that the debtors
obligated themselves in solidum.Having done so, the
creditor can bringits action in toto against any one of
them.
This was surely the purpose in demanding that the
obligationcontracted should be solidary having in
mind the principle of law that, "when theobligation is
constituted as a conjoint and solidary obligation each
one of thedebtors is bound to perform in full the
undertaking which is the subject matter ofsuch
obligation."(Doctrine)
2. Solidarity may exist even though the debtors are not
bound in the samemanner and for the same periods and
under the same conditions.(Doctrine)
Even though the creditor may have stipulated with
someof the solidarydebtors diverse installments and
conditions, as in this case, Inchausti & Co. did withits
debtors Manuel, Francisco, and Carmen Yulo throughthe
instrument of May 12,1911, this does not lead to the
conclusion that the solidarity stipulated in theinstrument
of August 12, 1909 is broken.
3. An obligation to pay a sum of money is not novated in
a new instrumentwherein the old is ratified, by changing
only the term of payment and adding otherobligations
not incompatible with the old one.
The contract of May 12, 1911, does not constitute a
novation of theformer one of August 12, 1909, with
respect to the other debtors who executed thiscontract, or
more concretely, with respect to the defendant Gregorio
INCIONG VS CA
CASE DIGESTS
Yulo because in order that an obligation may be
extinguished by another whichsubstitutes it, it is
necessary that it should be so expressly declared or that
the oldand the new be incompatible in all points.
Moreover, the instrument of May 12, 1911 expressly and
clearlystated that the said obligation of Gregorio Yulo to
pay the P253,445.42 sued forexists, stipulating that the
suit must continue its course and, if necessary, thesethree
parties would cooperate in order that the action against
Gregorio Yulo mightprosper.
It is always necessary to state that it is the intention of
the contractingparties to extinguish the former obligation
by the new one. There exist noincompatibility between
the old and the new obligation.
(3.1) The obligation being solidary, the remission of any
part of the debt made bya creditor in favor of one or
more of the solidary debtors necessarily benefits
theothers.
Although the contract of May 12, 1911, has not novated
that of August12, 1909, it has affected that contract and
the outcome of the suit brought againstGregorio Yulo
alone for the sum of P253,445.42; and in consequence,
the amountstated in the contract of August 12, 1909,
cannot be recovered but only that statedin the contract of
May 12, 1911, by virtue of the remission granted to the
three ofthe solidary debtors in this instrument.
He cannot be ordered to pay theP253,445.42 claimed
from him in the suit here, because he has been benefited
bythe remission made by the plaintiff to three of his co-
debtors. Consequently, thedebt is reduced to 225,000
pesos.
DECISION
Judgment appealed from reversed.
Defendant to pay Inchausti & Co. P112,500 with the
interest stipulated in the instrument of May 12,1911,
from March 15, 1911, and the legal interest on this
interest due, from thetime that it was claimed, without
any special finding as to costs.
NOTES
L2
FACTS
In February 1983, Rene Naybe took out a loan from
Philippine Bank of Communications (PBC) in the
amount of P50k. For that he executed a promissory note
in the same amount. Naybe was able to convince
Baldomero Inciong, Jr. and Gregorio Pantanosas to co-
sign with him as co-makers. The promissory note went
due and it was left unpaid. PBC demanded payment
from the three but still no payment was made. PBC then
sue the three but PBC later released Pantanosas from its
obligations. Naybe left for Saudi Arabia hence cant be
issued summons and the complaint against him was
subsequently dropped. Inciong was left to face the suit.
He argued that that since the complaint against Naybe
was dropped, and that Pantanosas was released from his
obligations, he too should have been released.
ISSUE: Whether or not Inciong should be held liable.
HELD: Yes. Inciong is considering himself as a
guarantor in the promissory note. And he was basing his
argument based on Article 2080 of the Civil Code which
provides that guarantors are released from their
obligations if the creditors shall release their debtors. It
is to be noted however that Inciong did not sign the
promissory note as a guarantor. He signed it as a solidary
co-maker.
A guarantor who binds himself in solidum with the
principal debtor does not become a solidary co-debtor to
all intents and purposes. There is a difference between a
solidary co-debtor and a fiador in solidum (surety). The
latter, outside of the liability he assumes to pay the debt
before the property of the principal debtor has been
exhausted, retains all the other rights, actions and
benefits which pertain to him by reason of the fiansa;
while a solidary co-debtor has no other rights than those
bestowed upon him.
Because the promissory note involved in this case
expressly states that the three signatories therein
are jointly and severally liable, any one, some or all of
them may be proceeded against for the entire
obligation. The choice is left to the solidary creditor
(PBC) to determine against whom he will enforce
collection. Consequently, the dismissal of the case
against Pontanosas may not be deemed as having
discharged Inciong from liability as well. As regards
Naybe, suffice it to say that the court never acquired
jurisdiction over him. Inciong, therefore, may only have
recourse against his co-makers, as provided by law.