CASTELLVI DE HIGGINS VS. SELLNER
41 PHIL. 142MALCOLM, J.
This is an action brought by plaintiffs to recover fromdefendant the sum of P10,000. The brief decision of the trialcourt held that the suit was premature, and absolved thedefendant from the complaint, with the costs against the plaintiffs. Sellner wrote;
…I will, within fifteen days after notice of such default, pay youin cash the sum of P10,000 and interest upon your surrendering to me the three thousand shares of stock of the Keystone Mining Co. held by you as security for the payment of said note.
Determination of defendant's status in the transaction referredto. Plaintiffs contend that he is a surety; defendant contendsthat he is a guarantor. Plaintiffs also admit that if defendant isa guarantor, articles 1830, 1831, and 1834 of the Civil Codegovern.
The points of difference between a surety and a guarantor arefamiliar to American authorities. A surety and a guarantor arealike in that each promises to answer for the debt or default of another. A surety and a guarantor are unlike in that the suretyassumes liability as a regular party to the undertaking, whilethe liability as a regular party to upon an independentagreement to pay the obligation if the primary pay or fails todo so. A surety is charged as an original promissory; theengagement of the guarantor is a collateral undertaking. Theobligation of the surety is primary; the obligation of theguarantor is secondary.It is perfectly clear that the obligation assumed by defendantwas simply that of a guarantor, or, to be more precise, of the
whose responsibility is fixed in the Civil Code. Theletter of Mr. Sellner recites that if the promissory note is not paid at maturity, then, within fifteen days after notice of suchdefault and upon surrender to him of the three thousand sharesof Keystone Mining Company stock, he will assumeresponsibility. Sellner is not bound with the principals by thesame instrument executed at the same time and on the sameconsideration, but his responsibility is a secondary one foundin an independent collateral agreement, Neither is Sellner jointly and severally liable with the principal debtors.
PICZON VS. PICZON
61 SCRA 67 (1974)BARREDO, J.
AGREEMENT OF LOAN KNOW YE ALL MEN BY THESE PRESENTS:That I, ESTEBAN PICZON, of legal age, married, Filipino, and resident of and with postal address in the municipality of Catbalogan, Province of Samar, Philippines, in my capacity asthe President of the corporation known as the "SOSING- LOBOS and CO., INC.," as controlling stockholder, and at the same time as guarantor for the same, do by these presentscontract a loan of Twelve Thousand Five Hundred Pesos(P12,500.00), Philippine Currency, the receipt of which ishereby acknowledged, from the "Piczon and Co., Inc." another corporation, the main offices of the two corporations being inCatbalogan, Samar, for which I undertake, bind and agree touse the loan as surety cash deposit for registration with theSecurities and Exchange Commission of the incorporation papers relative to the "Sosing-Lobos and Co., Inc.," and toreturn or pay the same amount with Twelve Per Cent (12%)interest per annum, commencing from the date of executionhereof, to the "Piczon and Co., Inc., as soon as the said incorporation papers are duly registered and the Certificate of Incorporation issued by the aforesaid Commission. IN WITNESS WHEREOF, I hereunto signed my name inCatbalogan, Samar, Philippines, this 28th day of September,1956.
:Whether or not Esteban was only a guarantor and not a surety.RulingUnder the terms of the contract, Annex A, Esteban Piczonexpressly bound himself only as guarantor, and there are nocircumstances in the record from which it can be deduced thathis liability could be that of a surety. A guaranty must beexpress, (Article 2055, Civil Code) and it would be violativeof the law to consider a party to be bound as a surety when thevery word used in the agreement is "guarantor