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    Tupaz IV & Tupaz vs. CA & Bpi

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    Vian O.
    This case involved two commercial letters of credit that Jose and Petronila Tupaz obtained from BPI bank on behalf of El Oro Corporation to finance raw materials. Jose Tupaz signed one of the trust receipts in his personal capacity while both signed the other in their corporate capacities. When El Oro did not pay back the loans, BPI sued for estafa. The Supreme Court ruled that (1) Jose Tupaz was personally liable as a guarantor for signing in his personal capacity; (2) Petronila was not liable since she did not sign that trust receipt; and (3) as guarantor, Jose waived the requirement to first exhaust El Oro's assets by agreeing

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    Tupaz IV & Tupaz vs. CA & Bpi

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    Vian O.
    803 views2 pages
    This case involved two commercial letters of credit that Jose and Petronila Tupaz obtained from BPI bank on behalf of El Oro Corporation to finance raw materials. Jose Tupaz signed one of the trust receipts in his personal capacity while both signed the other in their corporate capacities. When El Oro did not pay back the loans, BPI sued for estafa. The Supreme Court ruled that (1) Jose Tupaz was personally liable as a guarantor for signing in his personal capacity; (2) Petronila was not liable since she did not sign that trust receipt; and (3) as guarantor, Jose waived the requirement to first exhaust El Oro's assets by agreeing

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    This case involved two commercial letters of credit that Jose and Petronila Tupaz obtained from BPI bank on behalf of El Oro Corporation to finance raw materials. Jose Tupaz signed one of the trust receipts in his personal capacity while both signed the other in their corporate capacities. When El Oro did not pay back the loans, BPI sued for estafa. The Supreme Court ruled that (1) Jose Tupaz was personally liable as a guarantor for signing in his personal capacity; (2) Petronila was not liable since she did not sign that trust receipt; and (3) as guarantor, Jose waived the requirement to first exhaust El Oro's assets by agreeing

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    803 views2 pages

    Tupaz IV & Tupaz vs. CA & Bpi

    Uploaded by

    Vian O.
    This case involved two commercial letters of credit that Jose and Petronila Tupaz obtained from BPI bank on behalf of El Oro Corporation to finance raw materials. Jose Tupaz signed one of the trust receipts in his personal capacity while both signed the other in their corporate capacities. When El Oro did not pay back the loans, BPI sued for estafa. The Supreme Court ruled that (1) Jose Tupaz was personally liable as a guarantor for signing in his personal capacity; (2) Petronila was not liable since she did not sign that trust receipt; and (3) as guarantor, Jose waived the requirement to first exhaust El Oro's assets by agreeing

    Copyright:

    © All Rights Reserved
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    of 2

    TUPAZ IV & TUPAZ VS.

    CA & BPI

    G.R. NO. 145578

    NOVEMBER 18, 2005

    FACTS:

    El Oro Corporation had a contract with the Philippine Army to supply the latter with survival bolos. To
    finance the purchase for its raw materials, petitioners Jose C. Tupaz IV and Petronila C. Tupaz, the Vice-
    President for Operations and Vice-President/Treasurer of El Oro Corporation, applied 2 commercial
    letters of credit with respondent bank BPI in favor of Tanchaoco Incorporated for ₱564,871.05 and
    ₱294,000 for Maresco Corporation. Petitioner Jose C. Tupaz IV signed, in his personal capacity, a trust
    receipt corresponding to the letter of credit in favor of Tanchaoco Inc., while the letter of credit
    pertaining to Maresco Corp., both Jose and Petronila Tupaz signed in their capacities as officers of El Oro
    Corporation, and bound themselves to remit the proceeds to respondent bank, if sold, or to return the
    goods, if not sold. After Tanchaoco Incorporated and Maresco Corporation delivered the raw materials
    to El Oro Corporation, BPI paid ₱564,871.05 and ₱294,000, respectively. Petitioners did not comply with
    their undertaking under the trust receipts claiming that the AFP had delayed paying for the survival
    bolos.

    BPI charged petitioners with estafa under Section 13, PD 115 or the Trust Receipts Law. The trial court
    acquitted petitioners but ordered El Oro Engraver Corporation, Jose C. Tupaz IV and Petronila Tupaz,
    jointly and solidarily, to pay BPI of the outstanding balance. CA affirmed the ruling. Hence, the petition
    before the Supreme Court.

    ISSUE:
    Whether petitioner Jose Tupaz is liable as a guarantor only of El Oro Corporation as he signed the trust
    receipts in his personal capacity

    RULING:
    Yes. For the trust receipt dated 30 September 1981 (letter of credit in favor of Tanchaoco Inc), the dorsal
    portion of which petitioner Jose Tupaz signed alone, we find that he did so in his personal capacity.
    Petitioner Jose Tupaz did not indicate that he was signing as El Oro Corporation’s Vice-President for
    Operations. Hence, petitioner Jose Tupaz bound himself personally liable for El Oro Corporation’s
    debts. Not being a party to the trust receipt dated 30 September 1981, petitioner Petronila Tupaz is not
    liable under such trust receipt.

    In Prudential Bank v. Intermediate Appellate Court, the Court interpreted a substantially identical
    clause in a trust receipt signed by a corporate officer who bound himself personally liable for the
    corporation’s obligation. The petitioner in that case contended that the stipulation "we jointly and
    severally agree and undertake" rendered the corporate officer solidarily liable with the corporation. We
    dismissed this claim and held the corporate officer liable as guarantor only. The Court further ruled that
    had there been more than one signatories to the trust receipt, the solidary liability would exist between
    the guarantors. We held: The clause "we jointly and severally agree and undertake" refers to the
    undertaking of the two (2) parties who are to sign it or to the liability existing between themselves. It
    does not refer to the undertaking between either one or both of them on the one hand and the
    petitioner on the other with respect to the liability described under the trust receipt.
    Respondent bank’s suit against petitioner Jose Tupaz stands despite the Court’s finding that he is
    liable as guarantor only. First, excussion is not a pre-requisite to secure judgment against a guarantor.
    The guarantor can still demand deferment of the execution of the judgment against him until after the
    assets of the principal debtor shall have been exhausted. Second, the benefit of excussion may be
    waived. Under the trust receipt dated 30 September 1981, petitioner Jose Tupaz waived excussion
    when he agreed that his "liability in [the] guaranty shall be DIRECT AND IMMEDIATE, without any
    need whatsoever on xxx [the] part [of respondent bank] to take any steps or exhaust any legal
    remedies xxx." The clear import of this stipulation is that petitioner Jose Tupaz waived the benefit of
    excussion under his guarantee.

    As guarantor, petitioner Jose Tupaz is liable for El Oro Corporation’s principal debt and other accessory
    liabilities (as stipulated in the trust receipt and as provided by law) under the trust receipt dated 30
    September 1981. That trust receipt (and the trust receipt dated 9 October 1981) provided for payment
    of attorney’s fees equivalent to 10% of the total amount due and an "interest at the rate of 7% per
    annum, or at such other rate as the bank may fix, from the date due until paid xxx." In the applications
    for the letters of credit, the parties stipulated that drafts drawn under the letters of credit are subject to
    interest at the rate of 18% per annum.

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