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Contracts of Security
CASES:
ZOBEL vs CA
-
A: you cannot.
2.
Personal Security
Cause
MACHETTI CASE
-
Guaranty vs Surety
CASTELLVI vs SELLNER
SC: NO. there mere fact that you are the president
and at the same time the majority stockholder,
does not automatically make you a surety if you
merely signed as a guarantor. Moreover, there is a
doctrine in corporation law called the DOCTRINE
OF SEPARATE ENTITY, which states that the debt of
the corp is not the debt of its officers or
stockholders even if majority stockholder.
If you are a surety and you pay the obligation you can
recover the entire amount from the debtor. Unlike the
rules of solidary obligation where a solidary debtor can
recover only the portion paid which is the share of the
co-debtor. In here, the solidary guarantor can recover
the ENTIRE amount from the debtor, in the sense that
he was not obligated in the original obligation. He is
just a solidary guarantor.
1.
A. TRUE.
CONSENSUAL
GRATUITOUS or ONEROUS
The presumption is that if there is no mention of any
particular consideration to the guarantor then it is
gratuitous.
The guarantor cannot claim that he was not paid by the
agreed compensation therefore he is not bound. This is
in the case of PHIL. PRYCE ASSURANCE CORP. vs CA.
SEVERINO vs SEVERINO
The obligation secured here is the obligation of
Guillermo to pay his half sister and stepmother and this
was also secured by mr. chaos. When mr. severino
failed to pay the last installment, the sister sued mr.
chaos. So mr. chaos said I did not receive any
compensation for my undertaking so im not bound.
SC held: There is no requirement that you must be paid
a valuable consideration, you are bound because causa
that supports a principal obligation was supported,
which was obligation of mr. severino.
KINDS
A.
By its origin
CONVENTIONAL- constituted by contract
LEGAL- required by substantive or procedural
law
JUDICIAL- required by a court from a litigant
B. By its extent
INDEFINITE or UNLIMITED or SIMPLE- cover the
principal obligation, accessories and cost
incurred after the guarantor has been judicially
asked to pay.
Guaranty proper
Sub-guaranty
(to
guarantee
guarantors solvency)
By the liability of the guarantor
NORMAL or ORDINARY- simple
guarantee proper; subsidiary
SOLIDARY- suretyship
the
guarantee;
DE GUZMAN vs SANTOS
The principal debtor here refused to reimburse the
guarantor of the amount paid by the guarantor
because he never gave his consent to the undertaking.
SC HELD: NO. You were benefited. Even if the debtor
did not consent the debtor is still liable to the
guarantor.
RULE IF DEBTOR DOES NOT GIVE CONSENT: The
guarantor can only recover to the extent that the
debtor is benefited.
OBLICON: the creditor is not bound to accept payment
or performance by a third person who has no interest in
the fulfillment of the obligation, unless there is
stipulation to the contrary.
Whoever pays for another MAY DEMAND from the
DEBTOR WHAT HE HAS PAID, except if he paid without
the knowledge or against the will of the debtor, he can
recover only insofar as the payment has been
BENEFICIAL to the debtor.
a.
Q. change a bit of the previous, I am now a surety not a
guarantor. Can you sue me?
A. Yes. Because my liability is primary.
Q.Remember that a guaranty is an accessory contract.
What happens if the principal obligation is
extinguished? X owes you 1M. I secure his obligation.
Then you condone his obligation. Can you collect from
me?
A.
1.
2.
3.
EFFECT OF
PREMIUM
PRINCIPAL
HAS
NOT
PAID
THE
KANGLEON
FORM
MACONDRAY vs PINON
SC HELD:
EFFECTS OF GUARANTY
PROCEDURE:
the creditor must file a case against the debtor
alone
the creditor then shall ask the court to notify the
guarantor of the action
THE
BENEFIT
OF
EXHAUSTION
BAYLON vs CA
Not assign but it goes like this, X owes you 1M, G
guaranteed the obligation. When defaulted C creditor,
filed a case of collection against X and G. but X could
not be found so X could not be served with summon.
But G was served with summon. So G filed an answer.
The case proceeded against G only. Judgment was
renderd against G (murag sa machetti case). So G
invoked the benefit of exhaustion.
SC said that the judgment cannot be executed against
G. this is because the judgment was rendered against
the principal debtor who was not summoned in the
case. So how can the creditor prove that the creditor
cannot pay therefore no judgment against the principal
debtor.
JN DEVT CORP vs PHIL
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BENEFIT
OF
EXHAUSTION
NOT
1.
2.
waiver JN CASE
waiver by agreeing that liability is direct
and immediate - also in the TUPAZ case
where topaz waive the privilege when he
agreed that his liability in the guaranty is direct
and immediate. Without the creditor to take
any steps to exhaust or legal remedies of
execution.
3. Guarantor binds himself solidary a surety
cannot invoke exhaustion of the debtor
because creditor in surety ship the creditor
may go immediately against the surety.
4. Debtor is declared judicially insolvent there is proof that you cannot collect form the
debtor
5. Debtor cannot be sued in the Philippines
because he has absconded
6. Presumed that execution would not result
in the satisfaction of the judgment credit.
this is presumed when other previous writ of
execution were not satisfied so you cannot
expect na ma satisfy pana imo.
BITANGA vs PYRAMID
Court said It must be stressed that despite having
been served a demand letter at his office, petitioner
still failed to point out to the respondent properties of
Macrogen Realty sufficient to cover its debt as required
under Article 2060 of the Civil Code. Such failure on
petitioner's part forecloses his right to set up the
defense of excussion.
This emphasizes that requirement that it is not enough
for the guarantor to invoke the benefit of excusion he
must point out the creditor properties of the debtor.
After pointing out then kuwang pa. then he is liable to
pay under his undertaking as a guarantor.
Benefit of Division
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SC Ruling:
Mira Hermanos vs. Manila Tobacconists
Facts:
By virtue of a written contract entered into
between Mira Hermanos, Inc., and Manila
Tobacconists, Inc., the former agreed to deliver to
the latter merchandise for sale on consignment
under certain specified terms and the latter
agreed to pay to the former on or before the 20th
day of each month the invoice value of all the
merchandise sold during the preceding month.
Mira Hermanos, Inc., required of the Manila
Tobacconists, Inc., a bond of P3,000, which was
executed by the Provident Insurance Co., on
September 2, 1939, to secure the fulfillment of the
obligation of the Tobacconists under the contract
up to the sum of P3,000.
In the month of October, 1940, the volume of the
business of the Tobacconists having increased so
that the merchandise received by it on
consignment from Mira Hermanos exceeded
P3,000 in value, Mira Hermanos required of the
Tobacconist an additional bond of P2,000, and in
compliance with that requirement the defendant
Manila Compaia de Seguros, on October 16,
1940, executed a bond of P2,000 with the same
terms and conditions (except as to the amount) as
the bond of the Provident Insurance Co.
On June 1, 1941, a final and complete liquidation
was made of the transactions between Mira
Hermanos and the Tobacconists, as a result of
which there was found a balance due from the
latter to the former of P2,272.79, which
indebtedness the Tobacconists recognized but was
unable to pay. Thereupon Mira Hermanos made a
demand upon the two surety companies for the
payment of said sum.
The Provident Insurance Co., paid only the sum of
P1,363.67, which is 60% of the amount owned by
the Tobacconists to Mira Hermanos, alleging that
the remaining 40% should be paid by the other
surety, Manila Compaia de Seguros, in
accordance with article 1837 of the Civil Code. The
Manila Compaia de Seguros refused to pay the
balance, contending that so long as the liability of
the Tobacconists did not exceed P3,000, it was not
bound to pay anything because its bond referred
only to the obligation of the Tobacconists in excess
of P3,000 and up to P5,000.
Issue:
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Defenses
purely
personal;
minority,
incapacity and other vices of consent which the
principal debtor may waive; unless the guarantor was
ignorant of the vice as he could not the waive the
defect.
2.
to
receive
compensation
unless
no
compensation si agreed upon by the parties.
2. To seek relief for security in certain instances
a. How?
i. By an action in court by either
relief or additional security
ii. Directed against the principal
debtor
Q: G guarantor, X debtor, C creditor. G learned that X
the debtor is endanger of becoming insolvent. So G
GUARANTY
AS
BETWEEN
CO-
G1 Pays 150K
G2 pays G1 50K
G3 pays G1 50K
Scenario 3: w/ judicial demand by court or insolvency
of debtor + NA INSOLVENT SI G3
G1 pays 150K
G2 pays 75K
Bali gi tunga nlng nila ni G1 ug G2 kay way silbi
nman si G3
EXTINGUISHMENT OF GUARANTY
1.
G1 Pays 150K
CANNOT RECOVER FROM G2 & G3.
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PLEDGE
The second kind of security undertaking is what you
call real security undertaking and this includes pledge,
mortgage and antichresis.
Pledge
o I borrowed 20K from you to secure the
payment of my obligation I delivered to
you this computer to you in a pledge.
o Personal property is delivered to the
creditor or to a third person authorized
as a security for the payment of a
principal obligation.
How does pledge differ from chattel mortgage?
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Because
ordinarily
if
you
indorse a warehouse receipt,
you transfer whatever rights
you have over the goods in
favor of the transferee, BUT
here,
you
deliver
the
warehouse receipt only by way
of pledge, it is not a payment
of an obligation otherwise that
would have been dacion en
pago. This is pledge only where
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22
Pledgees
right
to
precautionary sale (to
sell) is preferred.
In case of foreclosure sale, the pledgor has the
right to bid and in fact, his bid would be
preferred if his bid is equal to that of the
highest bidder.
Right to return
the thing upon the
extinguishment of the obligation.
The pledgor, who is a third-party pledgor has
the rights of a guarantor. So he can seek for
reimbursement from the principal debtor and
he is likewise subrogated to the rights of the
creditor.
What is his obligation to notify the pledgee of a
defect of a thing delivered by way of pledge?
Why? If the pledgee suffers damage because of
the defected nature of the thing, pledgor can
be held liable for the damage caused. The
pledgor must know of the defect of the thing.
This is different from the contract of the sale,
which knowledge of the defect is immaterial.
Extinguishment of pledge:
o With the extinguishment of the
principal obligation because pledge is
an accessory contract.
o Destruction or the loss of the thing
subject of the pledge regardless of who
is the author of the loss. If the loss is
because of the fault of the pledgee, the
pledge is still extinguished; but liable
for damages.
o Renunciation by the pledgee.
Condonation is a gratuitous
abandonment by the creditor of
his claim against the debtor.
Because it is gratuitous, it is
similar to that of a donation
and because it is considered as
a donation it must comply with
the formal requirements of a
donation, then there must be
acceptance.
requirement
of
acceptance.
The
question:
If
the
movables
previously sequestered are returned to
the debtor, does the creditor still have
the cause of action against the
creditor?
Example, you live in Golden Valley
hotel and you havent paid the room
rates and the hotel sequestered your
personal effects, sends a notice to you
care of USC Law in a registered mail.
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