Credits for writing

1. E. ZOBEL INC V. COURT OF APPEALS - May 6, 1998

GR. No. 113931 290 SCRA 1

FACT: Private 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) to finance the purchase of two maritime barges and one
tugboat which would be used in their molasses business. The loan was granted subject
to the condition that respondent spouses will execute a chattel mortgage over the three
vessels to be acquired and that a continuing guarantee be executed by Ayala
International Philippines, Inc., now petitioner E.Zobel, Inc. in favor of SOLIDBANK.
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 for
dismissal. The trial court denied the motion to dismiss and required petitioner to file an
answer. Petitioner assailed the trial courts order. The appellate court dismissed the
petition.

ISSUE: Whether or not petitioner E. Zobel Inc., under the continuing guaranty obligated
itself to SOLIDBANK as a guarantor or a surety.

Held: Petitioner under the continuing guaranty obligated itself to SOLIDBANK as a

surety. 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, it is
the guarantor's own separate undertaking, in which the principal does not join while a
surety is the insurer of the debt, and he obligates himself to pay if the principal does not
pay and is usually bound with his principal by the same instrument, executed at the
same time, and on the same consideration. The contract clearly discloses that petitioner
assumed liability to SOLIDBANK, as a regular party to the undertaking and obligated
itself as an original promissor. It bound itself jointly and severally to the obligation with
the respondent spouses. The use of the term "guarantee" does not ipsofacto mean that
the contract is one of guaranty. Authorities recognize that the word "guarantee" is
frequently employed in business transactions to describe not the security of the debt but
an intention to be bound by a primary or independent obligation. The trial court has
observed that the interpretation of a contract is not limited to the title alone but to the
contents and intention of the parties.

PHILIPPINE BLOOMING MILLS, INC. & CHING V. CA - October 15, 2003

G.R. No. 142381 413 SCRA 445
Facts and ISSUE here
https://www.scribd.com/document/214583128/33-Phil-Blooming-Mills-vs-CA
Ching is liable for credit obligations contracted by PBM against TRB before and after the execution of the Deed of
Suretyship. This is evident from the tenor of the deed itself, referring to amounts PBM may now be indebted or
may hereafter become indebted to TRB.
The law expressly allows a suretyship for future debts. Article 2053 of the Civil Code provides:
A guaranty may also be given as security for future debts, the amount of which is not yet known; there can be no
claim against the guarantor until the debt is liquidated. A conditional obligation may also be secured.
Furthermore, this Court has ruled in Dio v. CA:
Under the Civil Code, a guaranty may be given to secure even future debts, the amount of which may not be known at
the time the guaranty is executed. This is the basis for contracts denominated as continuing guaranty or
suretyship. A continuing guaranty is one which is not limited to a single transaction, but which contemplates a
future course of dealing, covering a series of transactions, generally for an indefinite time or until revoked.
It is prospective in its operation and is generally intended to provide security with respect to future transactions
within certain limits, and contemplates a succession of liabilities, for which, as they accrue, the guarantor becomes
liable.
Otherwise stated, a continuing guaranty is one which covers all transactions, including those arising in the
future, which are within the description or contemplation of the contract of guaranty, until the
expiration or termination thereof.
How : A guaranty shall be construed as continuing when by the terms thereof it is evident that the object is to give a
standing credit to the principal debtor to be used from time to time either indefinitely or until a certain period;
especially if the right to recall the guaranty is expressly reserved. Hence, where the contract states that the guaranty
is to secure advances to be made from time to time, it will be construed to be a continuing one.
Examples: In other jurisdictions, it has been held that the use of particular words and expressions such as payment
of any debt, any indebtedness, or any sum, or the guaranty of any transaction, or money to be furnished the
principal debtor at any time, or on such time that the principal debtor may require, have been construed to
indicate a continuing guaranty.