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INTRA-STRATA ASSURANCE CORPORATION v. REPUBLIC

This case has been cited 8 times or more.

	GR No. 172404 2014-08-13	PEOPLE'S TRANS-EAST ASIA INSURANCE CORPORATION v. DOCTORS OF NEW MILLENNIUM HOLDINGS LEONEN, J.
[A] surety is released from its obligation when there is a material alteration of the contract in connection with which the bond is given, such as a change which imposes a new obligation on the promising party, or which takes away some obligation already imposed, or one which changes the legal effect of the original contract and not merely its form. A surety, however, is not released by a change in the contract which does not have the effect of making its obligation more onerous.[49]
	GR No. 179628 2013-01-16	MANILA INSURANCE COMPANY v. SPS. ROBERTO AND AIDA AMURAO DEL CASTILLO, J.
A contract of suretyship is defined as "an agreement whereby a party, called the surety, guarantees the performance by another party, called the principal or obligor, of an obligation or undertaking in favor of a third party, called the obligee. It includes official recognizances, stipulations, bonds or undertakings issued by any company by virtue of and under the provisions of Act No. 536, as amended by Act No. 2206."[50] We have consistently held that a surety's liability is joint and several, limited to the amount of the bond, and determined strictly by the terms of contract of suretyship in relation to the principal contract between the obligor and the obligee.[51] It bears stressing, however, that although the contract of suretyship is secondary to the principal contract, the surety's liability to the obligee is nevertheless direct, primary, and absolute.[52]
	GR Nos. 180631-33 2012-02-22	PHILIPPINE CHARTER INSURANCE CORPORATION v. CENTRAL COLLEGES OF PHILIPPINES MENDOZA, J.
Suretyship, in essence, contains two types of relationship the principal relationship between the obligee and the obligor, and the accessory surety relationship between the principal and the surety. In this arrangement, the obligee accepts the surety's solidary undertaking to pay if the obligor does not pay. Such acceptance, however, does not change in any material way the obligee's relationship with the principal obligor. Neither does it make the surety an active party to the principal obligee-obligor relationship. Thus, the acceptance does not give the surety the right to intervene in the principal contract. The surety's role arises only upon the obligor's default, at which time, it can be directly held liable by the obligee for payment as a solidary obligor.[54] [Emphases supplied]
	GR No. 185454 2011-03-23	STAR TWO v. HOWARD KO NACHURA, J.
Respondents acted as sureties under the Comprehensive Surety Agreement to secure the obligations of Jianshe to RCBC. A contract of suretyship is an agreement whereby a party, called the surety, guarantees the performance by another party, called the principal or obligor, of an obligation or undertaking in favor of another party, called the obligee.[23] The surety agreement is an accessory contract; and the surety becomes directly, primarily, and equally bound with the principal as the original promissor although the former possesses no direct or personal interest over the latter's obligations and does not receive any benefit therefrom.[24]
	GR No. 187116 2010-10-18	ASSET BUILDERS CORPORATION v. STRONGHOLD INSURANCE COMPANY MENDOZA, J.
Suretyship, in essence, contains two types of relationship - the principal relationship between the obligee (petitioner) and the obligor (Lucky Star), and the accessory surety relationship between the principal (Lucky Star) and the surety (respondent). In this arrangement, the obligee accepts the surety's solidary undertaking to pay if the obligor does not pay. Such acceptance, however, does not change in any material way the obligee's relationship with the principal obligor. Neither does it make the surety an active party to the principal obligee-obligor relationship. Thus, the acceptance does not give the surety the right to intervene in the principal contract. The surety's role arises only upon the obligor's default, at which time, it can be directly held liable by the obligee for payment as a solidary obligor.[21]
	GR No. 177240 2010-09-08	PRUDENTIAL GUARANTEE v. ANSCOR LAND VILLARAMA, JR., J.
As regards the first requirement, the Performance Bond issued by the petitioner was meant to guarantee the supply of labor, materials, tools, equipment, and necessary supervision to complete the project. A guarantee or a surety contract under Article 2047[16] of the Civil Code of the Philippines is an accessory contract because it is dependent for its existence upon the principal obligation guaranteed by it.[17]
	GR No. 156946 2009-07-15	SECRETARY OF FINANCE v. ORO MAURA SHIPPING LINES BRION, J.
This principle is particularly true when it comes to the collection of taxes. As we stated in Intra-Strata Assurance Corporation v. Republic of the Philippines:[21]
	GR Nos. 158820-21 2009-06-05	STRONGHOLD INSURANCE COMPANY v. TOKYU CONSTRUCTION COMPANY NACHURA, J.
A contract of suretyship is an agreement whereby a party, called the surety, guarantees the performance by another party, called the principal or obligor, of an obligation or undertaking in favor of another party, called the obligee.[36] By its very nature, under the laws regulating suretyship, the liability of the surety is joint and several but is limited to the amount of the bond, and its terms are determined strictly by the terms of the contract of suretyship in relation to the principal contract between the obligor and the obligee.[37]