Philippine Blooming Mills, Inc., v. CA

Facts: 
This case stems from an action to compel Ching to pay TRB.

Ching was the Senior Vice President of PBM. In his personal capacity and not as a corporate officer, Ching signed a Deed of Suretyship binding himself.

TRB granted PBM letters of credit on application of Ching in his capacity as Senior Vice President of PBM. Ching later accomplished and delivered to TRB trust receipts, which acknowledged receipt in trust for TRB of the merchandise subject of the letters of credit. Under the trust receipts, PBM had the right to sell the merchandise for cash with the obligation to turn over the entire proceeds of the sale to TRB as payment of PBMs indebtedness. 

Ching further executed an Undertaking for each trust receipt.

PBM defaulted in its payment. PBM also defaulted on its trust loan.

PBM and Ching filed a petition for suspension of payments with the SEC. 

SEC placed all of PBMs assets, liabilities, and obligations under the rehabilitation receivership of Kalaw, Escaler and Associates.

10 months after the SEC placed PBM under rehabilitation receivership, TRB filed with the trial court a complaint for collection against PBM and Ching.

TRB moved to withdraw the complaint against PBM on the ground that the SEC had already placed PBM under receivership. The trial court thus dismissed the complaint against PBM.

PBM and Ching also moved to dismiss the complaint.

TRB filed an opposition to the MD. 

The trial court denied the MD with respect to Ching and affirmed its dismissal of the case with respect to PBM. MR was also denied.

Ching filed a Petition for Certiorari and Prohibition before the CA which court granted Chings petition and ordered the dismissal of the case. 

RTC found Ching liable to TRB. CA affirmed.

Issue: 

Whether Ching is liable for obligations PBM contracted after execution of the Deed of Suretyship

Held:

Ching is liable for credit obligations contracted by PBM against TRB before and after the execution of the Deed of Suretyship. 

The law expressly allows a suretyship for "future debts". Article 2053 of the Civil Code provides:

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. A conditional obligation may also be secured.