Facts: Felicisimo Reyes owed Rosa Reyes, and Pedro and Consolacion Reyes (creditors) certain amounts. Both creditors obtained writs of preliminary attachment against Felicisimo. Felicisimo and his surety, Imperial Insurance, posted bonds for dissolution of attachment. Both cases were tried jointly, and the creditors won the case against Felicisimo. The CA affirmed and remanded the case to the lower court (presided by Judge de los Angeles) for execution. Judge de los Angeles issued the writs of execution, but the sheriff returned them unsatisfied. The creditors sued for recovery on the surety bonds. Imperial opposed. The judge ruled against the counter-bonds (probably meaning that the creditors can recover from the bonds, not sure though). The creditors moved to execute. Imperial moved for Judge de los Angeles to reconsider decision, but the motion was denied. Judge de los Angeles granted writ of execution against the bonds filed by Imperial. Imperial appealed to the CA. CA dismissed. Imperial elevated the case to SC.

Issue (relevant): WON the creditors can go after the surety (Imperial) without first exhausting Felicisimo’s properties.

Held: Yes, in this case. Imperial bound itself solidarily with Felicisimo on the counterbonds. Article 2059 par 2 applies (excussion [previous exhaustion of the property of the debtor] shall not take place if the guarantor has bound himself solidarily with the debtor).

 

Rizal Commercial Banking Corporation, petitioner, vs.

Hon. Jose P. Arro, Judge of the Court of First Instance of Davao,and Residoro Chua, respondents. Date:31 July 1982

Ponente:De Castro,JFacts:Private respondent Residoro Chua, with Enrique Go, Sr., executed a comprehensivesurety agreement

to guaranty,above all, any existing or future indebtedness of Davao Agricultural Industries Corporation (Daicor), and/or

induce thebank at anytime or from time to time to make loans or advances or to extend credit to saidDaicor, provided that theliability shall

not exceed ay any time Php100,000.00.A promissory note for Php100,000.00 (for additional capital to the charcoal buy andsell and the

activated carbonimportation business) was issued in favor of petitionerRCBC payable a month after execution. This was signed by Go inhis

personalcapacity and in behalf of Daicor. Respondent Chua did not sign in said promissorynote. As the note was notpaid despite demands, RCBC

filed a complaint for a sum of money against Daicor, Go and Chua.The complaint against Chua was dismissed upon his motion, alleging that

thecomplaint states no cause of actionagainst him as he was not a signatory to the noteand hence he cannot be held liable. This was so despite RCBC’s

opposition, invokingthe comprehensive surety agreement which it holds to cover not just the note inquestion but alsoevery other

indebtedness that Daicor may incur from petitioner bank. RCBC moved for reconsideration of the dismissalbut to no avail. Hence, this petition.

Issue:WON respondent Chua may be held liable with Go and Daicor under the promissorynote, even if he was not asignatory t

o it, in light of the provisions of thecomprehensive surety agreement wherein he bound himself with Go andDaicor, assolidary

debtors, to pay existing and future debts of said corporation. Held:Yes, he may be held liable. Order dismissing the complaint against

respondent Chuareversed and set aside. Caseremanded to court of origin with instruction to set asidemotion to dismiss and to require

defendant Chua to answer thecomplaint. Ratio:The comprehensive surety agreement executed by Chua and Go, as

president andgeneral manager, respectively,of Daicor, was to cover existing as well as futureobligations which Daicor may incur with

RCBC. This was only subject tothe provisothat their liability shall not exceed at any one time the aggregate principal amount of

Php100,000.00. (Par.1of said agreement). The agreement was executed to induce petitioner Bank to grant any application for

aloan Daicor would request for.According to said agreement, the guaranty iscontinuing and shall remain in full force or effect until

the bank is notifiedof itsterminationDuring the time the loan under the promissory note was incurred, the agreement wasstill in full

force and effect and isthus covered by the latter agreement. Thus, even if Chua did not sign the promissory note, he is still

liable by virtue of the suretyagreement. The only condition necessary for him to beliable under the agreementwas that Daicor “is or

maybecome liable as maker, endorser, acceptor or otherwise.” The comprehensive surety agreement signed by

Go and Chua was as an accessoryobligation dependent upon theprincipal obligation, i.e., the loan obtained by Daicoras

evidenced by the promissory note. The surety agreementunequivocally shows that it was executed to guarantee futuredebts that may be incurred

by Daicor with petitioner, asallowed under NCC Art.2053.“A guaranty may also be given as security for future debts, the amount of

which isnot yet known; there can be no claimagainst the guarantor until the debt isliquidated. A conditional obligation may also be secured.”