Pacific Banking Corp vs.

Intermediate Appellate Court and

Roberto Regala, Jr.

ISSUE/S: Is Roberto liable only to the extent of P2,000.00?

FACTS:

HELD:

Petitioner bank issued a credit card to private

respondents wife, Celia Syjuco Regala. She applied on Oct. 24,
1975 and was issued and became effective on Oct. 29, 1975,
going over the credit limit and even extending from the Oct. 29,
1976 one-year deadline. As a condition, private respondent,
Roberto Regala, Jr., the husband, executed a Guarantors
Undertaking that makes him jointly and severally liable for any
and all indebtedness, obligations, charges or liabilities due and
incurred by Celia Regala.
Celias incurred charges reached up to P92,803.98 after
more than one year of using the credit card but she failed to
settle her account. the bank then sent demand letters to both
Celia and Roberto. They still failed to settle, thus the bank filed a
complaint with the trial court.
In his demand letter, Roberto contended that his liability
was limited only to P2,000.00 a month, the agreed credit limit.
Celia, on the other hand, remained silent. Having failed to appear
at their pre-trial conference, they were both declared in default by
the court.
The RTC decided in favor of the petitioner bank,
declaring Roberto to be jointly and severally liable to pay the total
charges with wife Celia. Upon appeal, however, appellant court
decided in favor of Roberto in that he is liable only for P2,000.00.

No. The Guarantors Undertaking was, in substance, a

contract of surety. In suretyship, the surety binds himself
solidarily with the principal debtor. As provided in Robertos
Guarantors Undertaking, he bound himself solidarily and jointly
to pay Pacific Banking Corp. any and all indebtedness,
obligations, charges or liabilities due and incurred by Celia
Regala. This was also a condition in applying for the banks
credit card (#5 of the Terms and Conditions).
Art. 2054 is not applicable in this in limiting the
guarantors liability as Roberto expressly bound himself up to the
extent of debtors indebtedness, also waiving any discharge in
case of any change or novation of the terms and conditions in
connection with the issuance of the credit card. He bound
himself as a surety continuously until all liabilities have been fully
paid - including additional and future debts of Celia.
Therefore, Roberto is held liable to the same extent as
Celia.