Author: Ramirez

PNB v ASUNCION (1977)

Petition: Instant petition for review on certiorari
Petitioner: Philppine National Bank
Respondents: Hon. Elias B. Asuncion, Fabar Incorporated, Jose Ma.
Barredo, Carmen B. Borromeo, Tomas L. Borromeo
Ponencia: Makiasar
DOCTRINE:
The Supreme Court should not diminish, increase or modify substantive
rights.
A substantive law cannot be amended by a procedural rule. (substantive
rights > procedural rights)
FACTS:
1. PNB granted Fabar Incorporated various credit accommodations and
advances to cover their importation of machinery and equipment. Total
outstanding balance was over P8 million.
2. These credit accommodations are secured by the joint and several
signatures of Barredo, C. Borromeo, and T. Borromeo (private
respondents) and Manuel Barredo.
3. They were not able to pay so PNB filed a case for collection against the
four of them, before the sala of Judge Asuncion.
4. Before the case could be decided, Manuel Barredo died. The Court
issued an Order of dismissal of case on the basis that:
a. a money claim does not survive death of the respondent
b. the claim can be filed with estate proceedings of Manuel,
pursuant to Sec. 6 Rule 86 of Revised Rules of Court
5. PNB filed a Motion saying that the dismissal should only be for the
deceased. The Court denied this.
ISSUE:
1. WoN the respondent Court erred in dismissing the case against all
the defendants when it should dismiss the case only as against the
deceased respondent
PROVISION:

Sec. 6 Rule 86 of Revised Rules of Court:

Where the obligation of the decedent is solidary with another debtor, the claim shall
be filed against the decedent as if he were the only debtor, without prejudice to the
right of the estate to recover contribution from the other debtor ...

RULING + RATIO:
1. YES.
Sec 6 Rule 86 of RRC = procedural; Article 1216 of the New Civil
Code = substantive
Court erred in dismissing the case by relying on Sec 6 Rule 86,
which is a procedural law
Sec 6 Rule 86 only sets up the procedure to follow if the
petitioner would choose to claim the collection of money against
the estate of the deceased solidary debtor. However, it does not
prevent the petitioner from collecting against the other surviving
solidary debtors.
Art 1216 of the New Civil Code is the applicable provision. It
gives the petitioner the right to "proceed against anyone of the
solidary debtors or some or all of them simultaneously" so the
choice is left to the petitioner as to whom he will enforce the
collection. It is not mandatory for him to dismiss the case and file
the claim of collection solely to the estate of the deceased
solidary debtor.
To require him to proceed against the estate alone, making it a
condition precedent for any collection against the surviving
debtors to prosper, would deprive him of his substantive rights.
To apply Sec 6 Rule 86 literally would repeal Art 1216. This
cannot be since a substantive law cannot be amended by a
procedural rule.
SC should not diminish, increase, or modify substantive rights.
Art 1216 must govern this case.
DISPOSITION: Orders of respondent Court are modified. Case is
remanded to respondent Court for further proceedings.