Tañedo v. Allied Banking Corporation

Summary

A banking law case involving a continuing guaranty dispute where individual guarantor Emilio Tañedo sought to be relieved of liability after Allied Banking Corporation and corporate debtor Cheng Ban Yek & Co., Inc. modified loan terms without his consent. The Supreme Court affirmed that the continuing guaranty contract expressly permitted the bank to extend or modify payment terms without surety consent, making the Fourth Amendatory Agreement valid. Even if the guaranty was a contract of adhesion, it remained enforceable because the guarantor was free to reject it entirely. The case establishes that express consent provisions in guaranty agreements protect banks' flexibility in loan modifications while maintaining surety liability, reflecting standard commercial banking practices for corporate lending.