REISS V MEMIJE

FACTS:
Memije entered into a contract with Kabalsa for the
repair of a house in Manila.
Kabalsa undertook to furnish the necessary materials
including lumber to be used in the repairs. He was
unable to secure credit therefor and was compelled to
pay cash for all purchases but he has no money, so, he
was unable to purchase the lumber, hence the work on
the house has been delayed.
Memije then accompanied the contractor to Reiss'
lumber yard and after satisfying Reiss as to his own
financial responsibility, he entered into an agreement
with them whereby they were to deliver the necessary
lumber to the contractor for use in the repair of his
house.
In pursuance of and in accordance with the directions
of Memije, Reiss delivered to Kabalsa a considerable
amount of lumber which was used in the repairs upon
Memije's house.
However, Kabalsa was not able to pay thus Reiss
instituted an action for collection of the unpaid balance.
Memije claimed that his alleged guaranty of the
payment was unenforceable for not being in writing.
ISSUE:
WON the alleged guaranty of payment of the purchase price of
the lumber, not being in writing, is unenforceable.
RULING:
NO. It is enforceable. The Statute of Fraud does not not
apply since Memije undertook to pay the purchase price
independently, as his own.
ANGELA MARIE A. ALMALBIS

Section 335 of Act No. 190 is as follows:

In the following cases an agreement hereafter made shall
be unenforceable by action unless the same, or some
note or memorandum thereof, by in writing, and
subscribed by the party charged, or by his agent
evidence, therefore, of the agreement can not be
received without the writing, or secondary evidence of its
contents:
xxx
xxx
xxx
2. A special promise to answer for the debt, default, or
miscarriage of another

Under Sec 335 of Act 190, a special promise to answer

for the debt of another shall be im writing.
The true test as to whether a promise is within the
statute had been said to lie in the answer to the
question whether the promise is an original or a
collateral one. If the promise is an original or an
independent one that is, if the promisor becomes
thereby primarily liable for the payment of the debt, the
promise is not within the statute. But, on the other
hand, if the promise is collateral to the agreement of
another and the promisor becomes thereby merely a
surety, the promise must be in writing.

PICZON V PICZON
FACTS:

Plaintiffs and defendants entered into an agreement of

loan.
The actionable document of plaintiffs states that:
Esteban Piczon, as president of Sosing-Lobos and
Co.,Inc. and at the same time guarantor for the same,
obtained a loan of P12, 500 from Piczon and Co., Inc.

That he agreed to use the load as surety cash deposit

for registration with the SEC of the incorporation
papers relative to the Sosing-Lobos and Co., Inc. and
to pay the same as soon as the said incorporation
papers are duly registered and the Certificate of
Incorporation is issued by the SEC.

ISSUE:
WON defendant Esteban Piczon is liable as a guarantor or
surety.

RULING:
Under the terms of the contract, Esteban Piczon expressly
bound himself as guarantor, and there are no circumstances in
the record from which it can be deduced that his liability could
be that of a surety.
A guaranty must be express under Art 2055 of the Civil Code,
and it would be violative of the law to consider a party to be
bound as a surety when the very word used in the agreement
is "guarantor".
MUNICIPALITY OF GASAN V MARASIGAN
FACTS:

The Municipality of Gasan put up at auction the

privilege of gathering whitefish spawn in its
jurisdictional waters for the period of one year.
Two bidders, Napa and Marasigan, appeared at the
auction. Both attached to their bids the certificate of not
being behind in the payment of any tax.
Napa proposed to accept the privilege by paying
P5,000 therefor, Marasigan proposed to do likewise,
but by paying only P4,200.

ANGELA MARIE A. ALMALBIS

The council of the municipality rejected Napa's bid and

accepted that of Marasigan, granting and selling to the
latter the privilege put up at auction for the sum of
P4,200.
To secure his compliance with the terms of the
contract, Marasigan filed the bond. Sevilla and Luna
bound themselves to pay the municipality the sum of
P8,400 if Marasigan failed to deposit one-fourth of
P4,200 in violation of the terms of the contract, for the
compliance with which they became sureties.
Before the municipality and Marasigan entered into
their contract and also before Marasigan's sureties
executed the bond, Napa, whose bid was rejected (for
the reason that he had not attached the certificate that
he is not behind in the payment of tax), forwarded a
protest to the provincial board that the municipality
violated section 2323 of the Administrative Code in
rejecting his bid.
The provincial board held that the rejection of Napa's
bid was invalid and suggested that the privilege should
be awarded to Napa who appeared to be the highest
bidder. The Executive Bureau concurred.
The municipality awarded the privilege to Napa but he
failed to pay the deposit and yielded the privilege to
Marasigan.
The municipality then sent a letter to Marasigan
informing him that the contract will take effect and that
he is given 10 days to pay.
Marasigan replied that the Executive Bureau informed
him that the offer was suspended and that the
municipality should refrain from carrying out and giving
efficacy to the contract.

ISSUE:
WON Marasigan and sureties should pay

RULING:
NO.

The contract was not consummated and was

cancelled. The contract ceased to have life or force to
bind each of the contracting parties. It ceased to be
valid from the time it was cancelled and this being so,
neither Marasigan nor his sureties were bound to
comply with the terms of their respective contracts of
fishing privilege and suretyship.

ANGELA MARIE A. ALMALBIS

This is so, particularly with respect to the suretiesappelants, because suretyship cannot exist without a
valid obligation
Guaranty is not, presumed it must be expressed and
cannot be extended beyond its specified limits.
Therefore, after eliminating the obligation for which
said sureties-appelants desired to answer with their
bond, the bond necessarily ceased and it ceases to
have effects.