16.

Guaranty and Suretyship (2047

2084)
a. Concept 2047

d. Effects of Guaranty 2076-2081

i. Between the guarantor and creditor
1. Wise vs. Tanglao 63 Phil 372
2. Southern vs. Barbosa 99 Phil 263

b. Guaranty vs. Suretyship 2047, 2nd

Paragraph

3. Prudential vs. IAC 216 SCRA 257

i. Agro vs. CA 348 SCRA 450

4. Imperial vs. Delos Angeles 111

SCRA 257

ii. Palmares vs. CA 288 SCRA 422

iii. People vs. Maniego 148 SCRA 30
iv. Towers vs. Ororama 80 SCRA 262
v. Machetti vs. Hospicio 43 Phil 297

c. Nature and Extent of Guaranty

2048-2057

5. Saavedra vs. Price 68 Phil 699

6. Vda de Syquia vs. Jacinto 60 Phil
861 - It is only when the property is in possession
of a tenant that the purchaser, or a redemptioner, is
entitled to receive from him the rents or the
reasonable value of the use and occupation
thereof, according to section 30; but even in such
case, the purchaser or redemptioner is
accountable for the amount he has thus received if
requested by the judgment debtor or a later
redemptioner wishing to redeem.3

7. Malayan vs. Salas 90 SCRA 252

i. RCBC vs. Cerro 115 SCRA 777
ii. Fortune vs. CA 267 SCRA 653
iii. Atok vs. CA 2222 SCRA 232
iv. BA Finance vs. CA 211 SCRA 112
v. PNB vs. CA 198 SCRA vs. 767
vi. Willex vs. CA 256 SCRA 478
vii. Security vs. Cuenca 341 SCRA
781
viii. RP vs. Palfox 43 SCRA 365

Malayan Insurance Co., Inc. v. Salas (90 SCRA

252), lays down the procedure regarding claims
for damages against an illegal attachment. It
states:
Under section 20, in order to recover damages
on a replevin bond (or on a bond for preliminary
attachment, injunction or receivership) it is
necessary (1) that the defendant-claimant has
secured a favorable judgment in the main action,
meaning that the plaintiff has no cause of action
and was not, therefore, entitled to the provisional
remedy of replevin; (2) that the application for
damages, showing claimant's right thereto and
the amount thereof, be filed in the same action
before trial or before appeal is perfected or
before the judgment becomes executory; (3) that
due notice be given to the other party and his
surety or sureties, notice to the principal not
being sufficient and (4) that there should be a
proper hearing and the award for damages
should be included in the final judgment (Luneta
Motor Co. v. Menendez, 117 Phil. 970, 974; 3
Moran's Comments on the Rules of Court, 1970

Ed., pp. 54-56. See Cruz v. Manila Surety &

Fidelity Co., Inc., 92 Phil. 699).
xxx

xxx

xxx

As may be gathered from section 20 of Rule 57,

the application for damages against the surety
must be filed (with notice to the surety) in the
Court of First Instance before the trial or before
appeal is perfected or before the judgment
becomes executory.
If an appeal is taken, the application must be
filed in the appellate court but always before the
judgment of that court becomes executory so
that the award may be included in its judgment
(Luneta Motor Co. v. Menendez, supra).
But it is not always mandatory that the appellate
court should include in its judgment the award of
damages against the surety. Thus, it was held
that where the application for damages against
the surety is seasonably made in the appellate
court, 'the latter must either proceed to hear and
decide the application or refer 'it' to the trial court
and allow it to hear and decide the same'
(Rivera v. Talavera, 112 Phil. 209, 219).
xxx

xxx

xxx

Note that under the second paragraph of section

20, Rule 57 of the present Rules of Court, the
damages suffered during the pendency of an
appeal in a case where the writs of attachment,
injunction and replevin or an order of
receivership were issued should be claimed in
the appellate court.
xxx

xxx

xxx

ii. Between debtor and guarantor - 20662072

iii. Between co-guarantors

e. Extinguishment of guaranty
i. Mc Conn vs, Associated 4 SCRA
251
ii. Security Bank vs. Cuenca 341
SCRA 781
iii. NASSCO vs. Torrento 20 SCRA
427
iv. PNB vs. CA 147 SCRA 273
v. PNB vs. Macapanga 99 Phil 180
vi. National Bank vs. Escueta 50 Phil
991 the

sureties were held liable

under their surety agreement
which was found to have been
accepted by the creditor, and it
was therein ruled that an
acceptance need not always be
express or in writing. The
acceptance need not necessarily be
express or in writing, but may be
indicated by acts amounting to
acceptance.
vii. Radio Corp vs. Roa 62 Phil 112

1. Tuason vs. Machuca 46 Phil 561

viii. Zobel vs. CA 290 SCRA 1