This Petition for Review on Certiorari^[1]   under Rule 45 of the Rules of Court challenges the Court of Appeals' (CA) Decision^[2] dated June 29, 2017, and Resolution^[3] dated March 20, 2018 which dismissed  petitioners' appeal, and, thus, affirmed the Regional Trial Court's  (RTC) Decision dated June 25, 2015, and Order dated January 20, 2016, finding petitioners solidarily liable to pay respondent its loan obligations.


On  November  19,  1997,  respondent  Landbank  of  the  Philippines (LBP)  extended to  petitioner  Duty  Paid  Import  Co.  Inc.,  (DPICI) an Omnibus  Credit  Line  Agreement  for  the  amount  of  Two  Hundred  Fifty Million Pesos (P250,000,000.00). A Comprehensive  Surety Agreement was executed by petitioners Ramon P. Jacinto, Rajah Broadcasting Network, Inc., and  RJ  Music  City, represented  by Jaime  J.  Colayco (Colayco)  and  Ma. Belen B. Quejano (Quejano) (collectively, Jacinto, et al.).^[4] Under the Comprehensive  Surety  Agreement,  Jacinto,  et  al., unconditionally, irrevocably, jointly and severally bound themselves to pay LBP the principal sum of P250,000,000.00 in the event DPICI fails to pay its loans, credits, advances, and other credit facilities and accommodation on maturity.^[5]

From July 24, 1997 to August 4, 1998, Colayco and Quejano executed the following promissory notes in favor of LBP:^[6]

Promissory Note	Date	Amount
B-2083 (15)	July 24, 1997	P50,000,000.00
B-2083 (17)	July 24, 1997	P40,000,000.00
B-2083 (18)	November 21, 1997	P25,000,000.00
B-2083 (19)	November 26, 1997	P15,000,000.00
B-2083 (20)	December 4, 1997	P10,000,000.00
B-2083 (21)	May 22, 1998	P50,000,000.00
B-2083 (22)	June 26, 1998	P25,000,000.00
B-2083 (23)	August 4, 1998	P35,000,000.00

As security for DPICI's loan in the amount of Ten Million Pesos (P10,000,000,00), Colayco, in his capacity as Vice President of RJ Holdings, Inc., executed a real estate mortgage over a condominium  unit covered by CCT No. 33328.

When DPICI failed to  pay its obligations, LBP extrajudicially foreclosed the real estate mortgage over the condominium unit on December 17, 1998. LBP  emerged  as the highest  bidder  at the auction  sale  held on February  5, 1999,  for the amount  of Two Million  Nine Hundred Seventy Thousand Pesos (P2,970,000.00).

Despite applying the proceeds of the foreclosure sale to the outstanding  loan obligations,  there remained a deficiency in the amount of Three Hundred Four Million Five Hundred Twenty-four Thousand Four Hundred Thirty-eight  Pesos and 98/100 cents (P304,524,438.98). LBP then sent  demand  letters  dated  September  22,  1998  and  October  7,  1998  to DPICI, to no avail.^[7]

This  led  LBP to file the  complaint  a quo for  collection  of sum  of money against herein petitioners.

By way of answer, petitioners contended that the complaint was prematurely filed as LBP allegedly agreed to a restructuring of the loan agreement.

They also argued that the actual amount of the obligations  was less  than  that  prayed  for  in LBP's  complaint.  Petitioners  also  raised  the defense that their  failure  to pay was  due to the Asian  economic  crisis  in 1997, which was a force majeure.

On  June  25,  2015,  the  RTC  promulgated its  Decision with  the following conclusion:

WHEREFORE,  premises considered,  judgment is  hereby RENDERED  in favor of [LBP] and against [petitioners]  ordering the latter to jointly and severally pay the former the following:

(a) The principal  obligation  in the amount of [P]166,853,078.57 plus interest thereon  at the rate of 6% per annum from 7 October  1998 until the same are fully paid;

(b) The amount  of [P]100,000.00 as and by way of attorney's  fees;

and

(c) Cost of suit.

The compulsory  counterclaims  of [petitioners]  are DENIED  for lack of merit.

Furnish copies of  this  Decision to  the  parties and  their  respective [counsel].

SO ORDERED.^[8]

Petitioners'  motion  for  reconsideration  was  likewise  denied  by  the RTC, prompting them to bring their appeal to the CA.

In denying petitioners'  appeal, the CA took note of the RTC's finding that the alleged restructuring of the loan obligations was not substantiated by evidence. The CA observed that petitioners' lone witness, Colayco, merely confirmed the existence of the Omnibus Credit Line Agreement and nothing more.^[9]   Contrariwise,  that the proposed  restructuring  of the loan agreement never came to pass was proven by a letter sent by petitioners' Vice President for Finance to LBP which acknowledged  that such proposal was denied by LBP.^[10] Because of these, the CA disregarded petitioners' defense that LBP's complaint was prematurely filed.

The CA also agreed with the RTC when the latter rejected petitioners' contention that their failure to pay was due to the economic crisis in 1997, which should be treated as force majeure.^[11] The CA was in further agreement with the RTC that petitioners were liable as sureties, and, as such, solidarily liable with DPICI as principal obligor.^[12]

Finally, the  CA refused  petitioners'  invocation  of Republic Act No. 3765 or the Truth in Lending Act for having been raised for the first time on appeal.^[13]

The CA disposed thus:

WHEREFORE, premises considered, the  present appeal is DISMISSED for lack of merit.

The Decision dated June 25, 2015 and Order dated January 20, 2016 issued by the Regional Trial Court, Branch 139, Makati City in Civil Case No.
99-1929 are AFFIRMED in toto.

SO ORDERED.^[14]

Dissatisfied with the denial of their appeal and subsequent motion for reconsideration, petitioners filed the instant petition raising the following:

Issues

A.  RESPONDENT HAS NO CAUSE OF ACTION OR RIGHT OF ACTION AGAINST THE PETITIONERS.

B. THE PRESENT ACTION WAS PREMATURELY FILED.

C. THE OBLIGATION OF DPICI WAS MUCH LESS THAN THE AMOUNTS CLAIMED BY THE RESPONDENT.

D.  PETITIONERS  COULD  NOT  BE  HELD  LIABLE  TO RESPONDENT FOR THE AMOUNTS CLAIMED WERE EXCESSIVE AND EXORBITANT ON ACCOUNT OF THE UNCONSCIONABLY HIGH  INTEREST   RATES   AND PENALTIES IMPOSED BY THE RESPONDENT.

E. PETITIONERS RAMON P. JACINTO, RAJAH BROADCASTING CORP. AND RJ MUSIC SHOULD NOT BE HELD SOLIDARILY LIABLE WITH [DPICI].

F.  PETITIONERS RAMON P. JACINTO, RAJAH BROADCASTING CORP. AND RJ MUSIC SHOULD NOT BE MADE TO PAY THE LIABILITIES OF [DPICI] CONSIDERING THAT IT[S] FAILURE TO PAY ITS DEBT WAS BASED ON JUSTIFIABLE REASONS.^[15]

In its Comment,^[16]   LBP seeks the outright  denial  of the petition  for having  raised  issues  not  constituting  questions  of  law. At  any  rate,  LBP contends  that  petitioners failed  to  prove  that  the  loan  agreement was restructured  and  that  petitioners  knowingly  executed  the  loan documents. LBP stresses that petitioners are liable not as guarantors but as sureties of DPICI's  debts,  and, consequently,  are  directly  and  absolutely bound  with DPICI as principal  debtor.^[17] LBP also finds no error committed  by the CA when it refused to treat the Asian economic crisis in 1997 as force majeure.^[18]

In Reply,^[19] petitioners assert that there was an agreement to restructure the loan albeit  LBP abruptly  declared  that their  loan  already  became due without consulting  the account officer handling petitioners' loan.^[20]   Because of the agreement  to restructure, petitioners  contend  that DPICI's loan was not yet due; thus, Jacinto et al.'s liability as sureties has yet to arise.^[21] Again, petitioners allege that they do not seek to evade liability, they only seek that the restructuring  of the loan agreement  be implemented  as their failure to pay was brought about by the economic crisis over which petitioners had no control.^[22]


For lack of merit, we deny the petition.

Only questions  of law should  be raised in Rule  45 petitions  as this Court is not a trier of facts and will not entertain questions of fact as factual findings of the CA and trial courts are final, binding, or conclusive on the parties, and on this Court when supported by substantial evidence.^[23]

The issues raised by petitioners in this petition are a virtual rehash, if not a verbatim reproduction,  of the issues raised before the CA.^[24]   Whether the parties  agreed  on  the  restructuring  of  the  loan,  whether  the  amounts sought to  be  collected by  LBP  are  much higher than DPICI's loan obligations, and whether petitioners bound themselves  as sureties under the Comprehensive Surety Agreement, are questions of fact which have all been settled by the courts below.

As in all general rules, the rule that only questions of law may be entertained in a petition for review also permits  exceptions. As enumerated in Pascual v. Burgos:^[25]

However, these rules do admit exceptions. Over time, the exceptions to  these rules have expanded. At  present, there are 10  recognized exceptions that were first listed in Medina v. Mayor Asistio, Jr.:

(1)  When  the conclusion  is a finding  grounded  entirely on speculation, surmises or  conjectures;  (2)  When  the  inference  made  is manifestly mistaken,  absurd  or  impossible;  (3)  Where  there  is  a  grave abuse of discretion; (4) When the judgment is based on a misapprehension of facts; (5) When the findings of fact are conflicting; (6) When the Court of Appeals, in making its findings, went beyond the issues of the case and the same is contrary to the admissions  of both appellant and appellee; (7) The  findings  of the  Court  of Appeals  are  contrary  to those  of the  trial court;  (8) When  the findings  of fact are conclusions  without  citation  of specific evidence on which they are based; (9) When the facts set forth in the  petition as well  as in the  petitioner's  main  and  reply  briefs are not disputed  by the respondents;  and (10) The finding of fact of the Court of Appeals is premised on the supposed absence of  evidence and is contradicted  by the evidence on record.^[26] (Internal citations omitted)

None of the above exceptions exists in the instant case; thus, we find no reason to depart from the similar findings of the appellate and trial courts.

Even when the Court considers the facts as alleged by petitioners, it will still arrive at the conclusion that they failed to establish by preponderance  of evidence  that the loan agreement  was restructured  as to give merit to the argument that LBP's complaint was prematurely filed.

Basic is the evidentiary rule that he who allege a fact bears the burden of proof.^[27]   Petitioners  merely allege that LBP had agreed to restructure the DPICI's loan obligations in the same manner that the obligations of DPICI's affiliate  company, First  Women's  Credit  Corporation,  was  allegedly restructured,  and, that pending such restructuring,  LBP had agreed to give DPICI a grace period within which to pay its obligations.^[28]   As unanimously found by the CA and the RTC, these allegations were never substantiated by evidence.^[29]   Petitioner's lone witness,  Colayco, merely  confirmed the existence of the Omnibus Credit Line Agreement in favor of DPICI. There was no evidence, documentary  or testimonial,  to prove the existence of the alleged agreement by the parties to restructure. Allegations are not evidence and without  evidence,  bare  allegations  do not  prove  facts.^[30] At most, the letter^[31]   presented by LBP proves that there was a proposal on the part of the petitioners to restructure  the loan, but that said proposal  was nevertheless denied by LBP.  Hence, what this settles is that LBP did not give its consent to the proposed restructuring; as such, there was no restructuring to speak of.

Petitioners'  argument that LBP was at fault for not having consulted its  account  officer  before  collecting  the  loan  is,  at  best,  specious.  The account officer merely keeps track of records pertinent to the account. By no measure is the account officer a party to the loan agreement which is strictly between LBP and petitioners.

Anent petitioners' argument that the amount sought to be collected by LBP was much higher than its total obligations, suffice to say that the lower courts uniformly determined that even after the application of the proceeds of the foreclosure sale, there remained a balance on the loan obligation in the amount of P166,853,078.57.^[32]   Quite glaringly, petitioners did not bother to disprove this finding by offering contrary proof.

In the same manner, we sustain  the finding that Jacinto,  et al., are liable as sureties. In  fact, petitioners  do not deny  their liability as sureties under  the Comprehensive  Surety  Agreement,  but  nevertheless  argue  that their liability arises only when the collaterals used to secure the obligation proved to be insufficient.^[33]   The  terms of  the Comprehensive Surety Agreement itself, which petitioners knowingly and intelligently entered into, belie
such contention:

WHEREAS, the BANK has granted to DUTY-PAID  IMPORT CO., INC.  (Save-a-Lot)  (hereinafter  referred  to  as  the  BORROWER) certain loans, credits, advances, and other credit facilities or accommodations  up to a principal amount of PESOS:  TWO  HUNDRED  FIFTY MILLION PESOS, (P250,000,000.00), Philippine Currency, (the OBLIGATIONS) with a condition, among others, that a joint and several liability undertaking be executed  by the  SURETY  for the  due  and punctual  payment  of all loans, credits, advances, and other credit facilities or
accommodations of the BORROWER due and payable to the BANK and for the faithful and prompt performance of any or all the terms and conditions thereof.

WHEREAS,  the SURETY has, for a valuable consideration  received from the BORROWER agreed to irrevocably, unconditionally  and jointly and severally undertake/guarantee the OBLIGATIONS.

 x x x x

14. Upon any default, the BANK may proceed directly against the SURETY without first proceeding against and without exhausting the
property of the BORROWER;^[34]   (Emphasis and underscoring in the original)

Thus,  under  the  terms  of  the  Comprehensive Surety  Agreement, Jacinto, et al., become immediately liable upon DPICI's  default without the need for LBP to first proceed against, and, exhaust the collaterals offered by DPICI.

Finally, petitioners'  plea to be absolved of liability on account of the Asian financial crisis in 1997, deserves scant consideration. Upon the petitioners rest the burden of proving that its financial distress which it claim to have suffered was the proximate cause of its inability to comply with its obligations.^[35]   The loan agreement was entered into on November 19, 1997, or well after the start of the Asian economic crisis. Petitioners  ought to be aware of the economic environment at that time, yet it chose to contract said obligations from LBP. It was a business judgment that entailed certain risks. In any case, the 1997 financial crisis that ensued in Asia did not constitute a valid justification to renege on one's obligations^[36]   and it is not among the fortuitous events contemplated under Article 1174 of the New Civil Code.^[37]

In all, we find no error on the part of the appellate court necessitating the Court's exercise of its discretionary review power under Rule 45.

WHEREFORE, the petition is DENIED.  The Decision dated June 29, 2017 and Resolution  dated March 20, 2018 of the Court of Appeals are AFFIRMED in toto.

SO ORDERED.

Peralta, C.J., (chairperson), Caguioa, (working chairperson), Reyes, J. Jr., Lazaro-Javier, and Lopez., JJ. concur.

---

^[1] Rollo, pp. 9-29.

^[2] Penned  by Associate  Justice  Ma.  Luisa C.  Quijano-Padilla and  concurred  in by  Associate  Justices Sesinando E. Villon and Rodil V. Zalameda (now a Member of the Court); id. at 31-39.

^[3] Id. at 41-42.

^[4] Id. at 11.

^[5] Id.

^[6] Id. at 32.

^[7] Id.

^[8] Id. at 33.

^[9] Id. at 35.

^[10] Id. at 36.

^[11] Id. at 34.

^[12] Id. at 38.

^[13] Id. at 36.

^[14] Id. at 39.

^[15] Id. at 20.

^[16] Id. at 73-91.

^[17] Id. at 84.

^[18] Id. at 85.

^[19] Id. at 98-103.

^[20] Id. at 98-99.

^[21] Id.at100.

^[22] Id. at 101.

^[23] Commissioner  of Internal Revenue v. Embroidery and Garments Industries (Phil.), Inc., 364 Phil. 541, 546 (1999).

^[24] Rollo, p. 79.

^[25] 776 Phil. 167, 182-183 (2016).

^[26] Id. at 182.

^[27] Lim v. Equitable  PCI Bank, 724 Phil. 453, 454 (2014).

^[28] Rollo, p. 13.

^[29] Id. at 82.

^[30] Sabellina v. Buray, 768 Phil. 224, 238 (2015).

^[31] Supra note 10.

^[32] Rollo, p. 35.

^[33]   Id. at 25.

^[34] Id. at 37.

^[35] See Asian Construction and Development Corp. v. PCI Bank, 522 Phil. 168, 180 (2006). 

^[36] Id.  

^[37] Mondragon  Leisure and Resorts Corp.  v. Court v. Appeals, 499 Phil. 268, 279 (2005).