PHIL. BLOOMING MILLS INC.

142381, Oct. 15, 2003

vs. CA., GR. No.

FACTS:
Petitioner Philippine Blooming Mills, Inc. (PBM)
obtained a loan from Traders Royal Bank (TRB).
Ching, the Senior
Vice-President
of
PBM,
signed
Deed of Suretyship
in
his personal
capacity and not as mere guarantors but as
primary obligors.
PBM and Ching filed a petition for suspension of
payments with the SEC, and eventually placed
under rehabilitation receivership.
Consequently, TRB dismissed complaint as to
PBM. Ching then alleged that the Deed of
Suretyship executed in 1977 could not answer for
obligations not yet in existence at the time of its
execution.
It could not answer for debts contracted by
petitioner PBM in 1980 and 1981. No accessory
contract of suretyship could arise without an
existing principal contract of loan.

Issue:
WON Ching is liable for credit obligations
contracted by Philippine Blooming Mills Inc.
against Traders Royal Bank before and after the
execution of the Deed of Suretyship.
Held:
Ching is liable for credit obligations contracted by
Philippine Blooming Mills Inc. against Traders
Royal Bank before and after the execution of the
Deed of Suretyship.
This is evident from the tenor of the deed itself,
referring to amounts to PBM may now be indebted
or may hereafter become indebted to Traders
Royal Bank. The law expressly allows a suretyship
for future debts.
Article 2053 provides that 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.