ASTILLO, VIRGIL MARI L.

Estate of Hemady v. Luzon Surety Co., Inc., GR L-8437

FACTS OF THE CASE:

The Luzon Surety Co. filed a claim against the Estate based on twenty different
indemnity agreements that was subscribed by a distinct principal and by the deceased,
K.H. Hemady, a surety solidary guarantor, the various principals in favor of different
creditors. The Luzon Surety Co. prayed for an allowance, as a claim of the value of the
twenty bonds it had executed in consideration of the counterbonds. The further asked
for judgment for the unpaid premiums and documentary stamps affixed to the bonds
with 12 percent thereon.
ISSUE OF THE CASE:
Whether or not the obligations and responsibilities of a decedent as a surety or
guarantor be transmitted to their respective heirs.
RULING:
The order appealed form is reversed, and the records are ordered reprimanded.
RATION DECIDENDI:
It was stated in the Article 1311 of the Civil Code that, Contracts only take effect
as between the parties, their assigns, and heirs, except in the case where the rights and
obligations arising from the contract are not transmissible by their nature, or by
stipulation or by provision of law. While in our successional system, it is the sole
responsibility of the heirs for their debts of their decedent cannot exceed the value of
the inheritance they receive from him. It is further stated in the Articles 774 and 776 of
the New Civil Code expressly provide, thereby confirming Article 1311 of the Civil Code.