Scribd Logo
Upload

Welcome to Scribd!

  • 180 views

    Zobel Inc vs. CA, Sps Claveria

    Uploaded by

    Jocelyn Michael
    a surety is distinguished from a guaranty in that a guarantor is the insurer of the solvency of the debtor and thus binds himself to pay if the principal is unable to pay while a surety is the insurer of the debt, and he obligates himself to pay if the principal does not pay.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Zobel Inc vs. CA, Sps Claveria

    Uploaded by

    Jocelyn Michael
    180 views1 page
    a surety is distinguished from a guaranty in that a guarantor is the insurer of the solvency of the debtor and thus binds himself to pay if the principal is unable to pay while a surety is the insurer of the debt, and he obligates himself to pay if the principal does not pay.

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    a surety is distinguished from a guaranty in that a guarantor is the insurer of the solvency of the debtor and thus binds himself to pay if the principal is unable to pay while a surety is the insurer of the debt, and he obligates himself to pay if the principal does not pay.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    180 views1 page

    Zobel Inc vs. CA, Sps Claveria

    Uploaded by

    Jocelyn Michael
    a surety is distinguished from a guaranty in that a guarantor is the insurer of the solvency of the debtor and thus binds himself to pay if the principal is unable to pay while a surety is the insurer of the debt, and he obligates himself to pay if the principal does not pay.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    G.R. No.

    113931 May 6, 1998


    E. ZOBEL, INC., petitioner,
    vs.
    THE COURT OF APPEALS, CONSOLIDATED BANK AND TRUST CORPORATION, and SPOUSES RAUL and ELEA R.
    CLAVERIA, respondents.
    FACTS OF THE CASE
    Respondent spouses Raul and Elea Claveria, doing business under the name "Agro Brokers," applied for a
    loan with respondent Consolidated Bank and Trust Corporation (now SOLIDBANK) in the amount of Two
    Million Eight Hundred Seventy Five Thousand Pesos (P2,875,000.00) to finance the purchase of two (2)
    maritime barges and one tugboat which would be used in their molasses business.
    The loan was granted subject to the condition that respondent spouses execute a chattel mortgage over
    the three (3) vessels to be acquired and that a continuing guarantee be executed by Ayala International
    Philippines, Inc., now herein petitioner E. Zobel, Inc., in favor of SOLIDBANK. The respondent spouses agreed
    to the arrangement. Consequently, a chattel mortgage and a Continuing Guaranty were executed.
    Respondent spouses defaulted in the payment of the entire obligation upon maturity. Hence, SOLIDBANK
    filed a complaint for sum of money with a prayer for a writ of preliminary attachment, against respondent
    spouses and petitioner.
    Petitioner moved to dismiss the complaint on the ground that its liability as guarantor of the loan was
    extinguished pursuant to Article 2080 of the Civil Code of the Philippines. It argued that it has lost its right to
    be subrogated to the first chattel mortgage in view of SOLIDBANK's failure to register the chattel mortgage
    with the appropriate government agency. SOLIDBANK opposed the motion contending that Article 2080 is
    not applicable because petitioner is not a guarantor but a surety.
    ISSUE
    Whether or not petitioner E. ZOBEL, INC. under the "Continuing Guaranty" obligated itself to SOLIDBANK as a
    guarantor or a surety
    RULING OF THE COURT
    The contract executed by petitioner in favor of SOLIDBANK, albeit denominated as a "Continuing
    Guaranty," is a contract of surety. The terms of the contract categorically obligates petitioner as "surety" to
    induce SOLIDBANK to extend credit to respondent spouses.
    A contract of surety is an accessory promise by which a person binds himself for another already bound,
    and agrees with the creditor to satisfy the obligation if the debtor does not. A contract of guaranty, on the
    other hand, is a collateral undertaking to pay the debt of another in case the latter does not pay the debt.
    A surety is usually bound with his principal by the same instrument, executed at the same time, and on the
    same consideration. He is an original promissor and debtor from the beginning, and is held, ordinarily, to
    know every default of his principal. Usually, he will not be discharged, either by the mere indulgence of the
    creditor to the principal, or by want of notice of the default of the principal, no matter how much he may
    be injured thereby. On the other hand, the contract of guaranty is the guarantor's own separate
    undertaking, in which the principal does not join. It is usually entered into before or after that of the
    principal, and is often supported on a separate consideration from that supporting the contract of the
    principal. The original contract of his principal is not his contract, and he is not bound to take notice of its
    non-performance. He is often discharged by the mere indulgence of the creditor to the principal, and is
    usually not liable unless notified of the default of the principal.
    Simply put, a surety is distinguished from a guaranty in that a guarantor is the insurer of the solvency of the
    debtor and thus binds himself to pay if the principal is unable to pay while a surety is the insurer of the debt,
    and he obligates himself to pay if the principal does not pay.
    The petition is DISMISSED.

    You might also like