Lawyerly

You're currently signed in as:
User

ASSET BUILDERS CORPORATION v. STRONGHOLD INSURANCE COMPANY

This case has been cited 3 times or more.

	GR No. 180898 2012-04-18	PHILIPPINE CHARTER INSURANCE CORPORATION v. PETROLEUM DISTRIBUTORS MENDOZA, 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.[40] Although the contract of a surety is secondary only to a valid principal obligation, the surety becomes liable for the debt or duty of another although it possesses no direct or personal interest over the obligations nor does it receive any benefit therefrom.[41] This was explained in the case of Stronghold Insurance Company, Inc. v. Republic-Asahi Glass Corporation,[42] where it was written: The surety's obligation is not an original and direct one for the performance of his own act, but merely accessory or collateral to the obligation contracted by the principal. Nevertheless, although the contract of a surety is in essence secondary only to a valid principal obligation, his liability to the creditor or promisee of the principal is said to be direct, primary and absolute; in other words, he is directly and equally bound with the principal.
	GR Nos. 180631-33 2012-02-22	PHILIPPINE CHARTER INSURANCE CORPORATION v. CENTRAL COLLEGES OF PHILIPPINES MENDOZA, J.
The case of Asset Builders Corporation v. Stronghold Insurance Company, Inc.[49] explains how a surety agreement works: As provided in Article 2047, the surety undertakes to be bound solidarily with the principal obligor. That undertaking makes a surety agreement an ancillary contract as it presupposes the existence of a principal contract. Although the contract of a surety is in essence secondary only to a valid principal obligation, the surety becomes liable for the debt or duty of another although it possesses no direct or personal interest over the obligations nor does it receive any benefit therefrom.[50] Let it be stressed that notwithstanding the fact that the surety contract is secondary to the principal obligation, the surety assumes liability as a regular party to the undertaking.[51]
	GR No. 177839 2012-01-18	FIRST LEPANTO-TAISHO INSURANCE CORPORATION v. CHEVRON VILLARAMA, JR., J.
Section 175 of the Insurance Code defines a suretyship as a contract or 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 under Act 536,[14] as amended. Suretyship arises upon the solidary binding of a person - deemed the surety - with the principal debtor, for the purpose of fulfilling an obligation.[15] Such undertaking makes a surety agreement an ancillary contract as it presupposes the existence of a principal contract. Although the contract of a surety is in essence secondary only to a valid principal obligation, the surety becomes liable for the debt or duty of another although it possesses no direct or personal interest over the obligations nor does it receive any benefit therefrom. And notwithstanding the fact that the surety contract is secondary to the principal obligation, the surety assumes liability as a regular party to the undertaking.[16]