PHILIPPINE NATIONAL BANK, PETITIONER, VS. HONORABLE ELIAS B. ASUNCION, FABAR INCORPORATED, JOSE MA. BARREDO, CARMEN B. BORROMEO AND TOMAS L. BORROMEO, RESPONDENTS.

Philippine National Bank (hereafter referred to as the
petitioner), on January 16, 1963, granted in favor of respondent Fabar Incorporated various credit accommodations and
advances in the form of a discounting line, overdraft line, temporary overdraft
line and letters of credit covering the importation of
machinery and equipment.  Petitioner
likewise made advances by way of insurance premiums covering the chattels
subject matter of a mortgage securing the aforementioned credit accommodations.  Said credit accommodations had an outstanding
balance of P8,449,169.98 as of May 13, 1977.

All of the above credit accommodations are secured by the joint
and several signatures of Jose Ma. Barredo, Carmen B. Borromeo and Tomas L. Borromeo (private respondents herein) and Manuel H. Barredo.  For
failure of private respondents to pay their obligations notwithstanding
repeated demands, petitioner instituted a case for collection against all
private respondents and Manuel H. Barredo in a complaint
dated October 31, 1972, and which was filed before the sala
of the Honorable Elias B. Asuncion, Judge of the Court of First Instance of
Manila, Branch XII (hereafter referred to as the respondent Court).

On May 19, 1975,
before the case could be decided, Manuel H. Barredo
died.  In a Manifestation dated June 6, 1975, counsel for private
respondents informed the respondent Court of said death.

Subsequently, respondent Court issued an Order of dismissal dated
November 29, 1976, which
is herein-below quoted as follows:

“In view of the death of defendant Manuel Barredo,
the Court hereby dismisses this case since the present suit is for a money
claim which does not survive the death of said defendant.

“Pursuant to the provisions of Section 6, Rule 86 of the
Revised Rules of Court, which provides:

‘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 x x x .’

the claim of
plaintiff may be filed  with the estate proceedings of the
decedent.”

Petitioner thereupon filed a Motion dated December 14, 1976 praying for the
reconsideration of respondent Court’s Order dismissing the case as against all
the defendants, contending that the dismissal should only be as against the
deceased defendant Manuel H. Barredo.

In an order dated January
26, 1977, respondent Court denied petitioner’s motion for
reconsideration for lack of meritorious grounds.

Hence, this instant
petition for review on certiorari.

Petitioner, in its lone
assignment of error, alleged that the respondent Court erred in dismissing the
case against all the defendants, instead of dis­missing the case only as
against the deceased defendant and thereafter proceeding with the hearing as
against the other defendants, private respondents herein.

Petitioner’s contention
is well taken.  Respondent Court’s
reliance on Section 6, Rule 86 of the Revised Rules of Court was erroneous.

A cursory perusal of Section 6, Rule 86 of the Revised Rules of
Court reveals that nothing therein prevents a creditor from proceeding against
the surviving solidary debtors.  Said provision merely sets up the procedure
in enforcing collection in case a creditor chooses to pursue his claim against
the estate of the deceased solidary debtor.  The rule
has been set forth that a creditor (in a solidary
obligation) has the option whether to file or not to file a claim against the
estate of the solidary debtor.  In construing Section 6, Rule 87 of the old
Rules of Court, which is the precursor of Section 6, Rule 86 of the Revised
Rules of Court, this Court   said, in the
case of Manila Surety & Fidelity Co., Inc. vs. Villarama,
et al. (107 Phil. 891) that:

“It is evident from the foregoing that Section 6 of Rule 87
(of the Old Rules of Court) provides the procedure should the creditor
desire to go against the deceased debtor, but there is cer­tainly nothing in
the said provision making compliance with such procedure a condition precedent
before an ordinary action against the surviving debtors, should the creditor
choose to demand payment from the latter, could be entertained to the extent
that failure to observe the same would deprive the court jurisdiction to take
cognizance of the action against the surviving debtors.  Upon the
other hand, the Civil Code expressly allows the creditor to proceed against any
one of the solidary debtors or some or all of them
simultaneously.”

It is crystal clear that Article 1216 of the New Civil Code is
the applicable provision in this matter. 
Said provision gives the creditor the right to “proceed against
anyone of the solidary debtors or some or all of them
simultaneously.” The choice is undoubtedly left to the solidary
creditor to determine against whom he will enforce collection.  In case of the death of one of the solidary debtors, he (the creditor) may, if he so chooses, proceed against
the surviving solidary debtors without necessity of
filing a claim in the estate of the deceased debtors.  It is not mandatory for him to have the case
dismissed as against the sur­viving debtors and file its claim against the
estate of the deceased solidary debtor, as was made
apparent in the aforequoted decision.  For to require the creditor to proceed
against the estate, making it a condition precedent for any collection action
against the surviving debtors to prosper, would deprive him of his substantive
rights provided by Article 1216 of the New Civil Code.

As correctly argued by
petitioner, if Section 6, Rule 86 of the Revised Rules of Court were applied
literally, Article 1216 of the New Civil Code would, in effect, be repealed
since under the Rules of Court, petitioner has no choice but to proceed against
the estate of Manuel Barredo only.  Obviously, this provision diminishes the
Bank’s right under the New Civil Code to proceed against any one, some or all
of the solidary debtors.  Such a construction is not sanctioned by
the principle, which is too well
settled to require citation, that a substantive law cannot be amended by a
procedural, rule.  Otherwise
stated, Section 6, Rule 86 of the Revised Rules of Court cannot be made to
prevail over Article 1216 of the New Civil Code, the former being merely
procedural, while the latter, substantive.

Moreover, no less than the New Constitution of the Philippines,
in Section 5, Article X, provides that rules
promulgated by the Supreme Court should not diminish, increase or modify
substantive rights.

WHEREFORE, JUDGMENT IS HEREBY RENDERED MODIFYING THE
APPEALED ORDERS OF RESPONDENT COURT
DATED NOVEMBER 29, 1976
AND JANUARY 26, 1977 IN THE
SENSE THAT AS AGAINST THE DECEASED MANUEL H. BARREDO, THE CASE IS DISMISSED,
BUT AS, AGAINST ALL THE OTHER SOLIDARY DEBTORS, THE CASE IS REMANDED TO RESPONDENT
COURT FOR FURTHER PROCEEDINGS.

NO COSTS.

SO ORDERED.

Teehankee, (Chairman), Martin,
Fernandez, and Guerrero, JJ., concur.

Muñoz Palma, J., took no part.