This case has been cited 2 times or more.
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2014-04-07 |
SERENO, C.J. |
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| In suretyship, the oft-repeated rule is that a surety's liability is joint and solidary with that of the principal debtor. This undertaking makes a surety agreement an ancillary contract, as it presupposes the existence of a principal contract.[31] Nevertheless, although the contract of a surety is in essence secondary only to a valid principal obligation, its liability to the creditor or "promise" of the principal is said to be direct, primary and absolute; in other words, a surety is directly and equally bound with the principal.[32] He becomes liable for the debt and duty of the principal obligor, even without possessing a direct or personal interest in the obligations constituted by the latter.[33] Thus, a surety is not entitled to a separate notice of default or to the benefit of excussion.[34] It may in fact be sued separately or together with the principal debtor.[35] | |||||
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2010-10-13 |
PEREZ, J. |
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| The essence of a continuing surety has been highlighted in the case of Totanes v. China Banking Corporation[19] in this wise: Comprehensive or continuing surety agreements are, in fact, quite commonplace in present day financial and commercial practice. A bank or financing company which anticipates entering into a series of credit transactions with a particular company, normally requires the projected principal debtor to execute a continuing surety agreement along with its sureties. By executing such an agreement, the principal places itself in a position to enter into the projected series of transactions with its creditor; with such suretyship agreement, there would be no need to execute a separate surety contract or bond for each financing or credit accommodation extended to the principal debtor.[20] | |||||