May the surety be held liable when the cardholder renewed the credit card without his consent?

Facts: Ongkeko acted as surety for his employee, Lodovica, in the latter’s application for credit card with BPI. The application was approved and Lodovica was given a P3,000.00 credit limit. In 1991, the credit card was renewed and Lodovica’s credit limit was increased to P10,000.00. As of May 12, 1996, Lodovica’s outstanding balance amounted to P22,476.61. BPI filed an action for sum of money against Lodovica and Ongkeko. In his Answer, Ongkeko admitted his undertaking but claimed that he can only be liable for the original credit limit of P3,000.00 and that the renewal of the credit card without his consent extinguished his undertaking.

Ruling: Article 1730 of the Civil Code provides: “If the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control.” Under the suretyship contract, Ongkeko solidarily obliged himself to pay BPI all the liabilities incurred under the credit card account, whether under the principal, renewal, or extension card issued, regardless of the changes or novation in the terms and conditions in the issuance and use of the credit card. The terms and conditions of his undertaking are unambiguous and well-defined; thus, there is no room for interpretation – only application. Given that Lodovica reneged on her obligations under the credit card account, Ongkeko is, therefore, liable (Ongkeko vs. BECC, G.R. No. 147275, March 31, 2006).