Gidwani vs. Domestic Insurance Co. of the Phils.

Facts: 2 securities were given to Domestic Insurance for the faithful compliance of the obligation of Plastic Era to pay the promissory note that it executed in favor of Manufacturers Bank & Trust Co. (MBTC) the counter- guaranty agreement jointly executed by Plastic Era and spouses Gidwani, and the second security was the pledge of shares of stock made by Sati B. Gidwani. Domestic Insurance paid Manufactures bank & Trust Company, thereby subrogating itself to the rights of the latter against Plastic Era, the maker of the note. Domestic Insurance sued Plastic Era and Spouses Gidwani under indemnity agreement, obtaining a judgment with partial satisfaction, by reason of which Domestic Insurance caused the sale at public auction of the pledged shares, with Domestic Insurance acquiring them as the highest bidder. Issue: WON Domestic Insurance abandoned and waived its right or cause of action under the agreement when it instituted the civil action based on guaranty-agreement and obtained a favorable judgment? Held: No, The indemnity agreement and pledge agreement are 2 different securities, and the creditor did not avail of the remedy to obtain a personal judgment against the debtor. It is not barred to enforce its claim against both securities. From the nature of the situation, Domestic Insurance cannot prosecute its claim against the 2 securities in one and the same action.