GUARANTY AND SURETYSHIP

 Guaranty is perfected upon consent. It need not be written for it to be valid. But
since the statute of frauds provides that the same shall be written (Art. 1303) the
contract becomes unenforceable. (A guarantor cannot be compel to pay the debt
of the debtor that becomes insolvent when the contract of guaranty is not written)
 Surety has a solidary obligation but is not a solidary debtor
 Guaranty and Suretyship are accessory contracts. Hence, the principal shall be
valid.
o Valid, not existing.
 Guaranty is essentially gratuitous.
 Parties in a guaranty: Guarantor and Debtor.
 There is no need to state the consideration in a contract of guaranty (In
consideration of love, kindness, benevolence, etc.) it is sufficient that the
guarantor support the obligation of the principal debtor.
 Types of guaranty
o As to origin:
1. Conventional- constituted by agreement of the parties
2. Legal- imposed by law.
3. Judicial- required by a court to guarantee the eventual right of a party
in a case.
 Guaranty and Suretyship cannot be presumed. There must be an express
agreement.
o No need to be notarized. Consent and in writing lang ang required.
 If the contract of guaranty specifically states the definite liability of the creditor,
the guarantor is only liable up to that amount. If it is not specified, it will not only
include the debt (principal obligation), he/she may be liable for the interest,
judicial costs.
 The characteristics:
1. Consensual
2. Unilateral- Guarantor to Debtor; After the fulfillment, the debtor is required to
indemnify the guarantor.
3. Nominate
4. Accessory
5. Formal
6. Generally Gratuitous
 Qualifications of a guarantor.(Art. 2056):
1. The guarantor possesses integrity.
2. He has capacity to bind himself.
3. He has sufficient property to answer for the obligation which he guarantees.
o What happens if the guarantor is convicted of a crime involving dishonesty
or he becomes insolvent? It does not affect the existence of a contract of
guaranty
o The death of a guarantor does not affect the existence of a contract
because the obligation to pay is transimissible.
o Remedy: Replace the guarantor (Art. 2057)
 Continuing guaranty or continuing suretyship- when by the terms thereof it is
evident that the object is to give a standing credit to the principal debtor to be
used from time to time either indefinitely or until a certain period, especially if the
right to recall the guaranty is expressly received.
 GR: The creditor must file the case against the debtor alone, not the guarantor
o Although in a case decided by the SC, the guarantor was impleaded for
purposes of convenience.
o The guarantor, even though impleaded in a case against the debtor, can
still exercise the benefit of excussion.
o