TITLE XV.

GUARANTY ARTICLE 2047-2084

Art. 2049. A married woman may guarantee an

obligation without the husbands consent, but
shall not thereby bind the conjugal partnership,
except in cases provided by law.

.
NATURE AND EXTENT- GUARANTY:
I. Characteristics of a guaranty:
1.) accessory: because it is dependent for its

Article 2049, just take note when a married

woman enters into a contract of guaranty.

Article 2050. If a guaranty is entered into

without the knowledge or consent, or
against the will of the principal debtor, the
provisions of articles 1236 and 1237 shall
apply.

So the effect is beneficial reimbursement or

subrogation, when is there
subrogation or
when is there beneficial
reimbursement only.

Article 2051. A guaranty may be

conventional, legal or judicial, gratuitous,
or by onerous title.

It may also be constituted, not only in

favor of the principal debtor, but also in
favor of the guarantor, with the latters
consent, or without his knowledge, or even
his objection.

So here we have the different kinds of guaranty.

We have a double guaranty or sub guaranty or
one constituted to guarantee the obligation of
the guarantor.

Article 2052. A guaranty cannot exist

without a valid obligation.

existence upon the principal obligation

2.) subsidiary & conditional
3.) unilateral
Also take note on the nature of the undertaking
of a Surety:
1.) Direct
2.) Immediate
3.) Absolute
4.) Primary
In other words we cal also say that it is soldiery
in nature. Nevertheless, distinguish or dont
forget the distinction between a solidary codebtor and a surety. Again, in the cases that we
have discussed we had pointed out the
distinctions between these two different
circumstances.
Also, we have mentioned the distinctions
between a contract of guaranty and suretyship,
always take not these distinctions to be able to
point out whether the contract involves a
guaranty or a suretyship because it is relevant
especially on the discussion on credit
exhaustion.
Art. 2048. A guaranty is gratuitous, unless there
is a stipulation to the contrary.

Under 2048 we have already discussed that a

guaranty is a gratuitous contract unless there is
a stipulation to the contrary. Now, if there is no
cause or consideration in the institution of the
suretyship or guaranty then the consideration
will be the same as that of the principal
obligation.

This document is for INTELLIGENT TRANSCRIBERS WHO ARE NOT DULL AND LAZY.

TITLE XV. GUARANTY ARTICLE 2047-2084

ATOK vs CA
Q: Who is the principal debtor here?
A: Sanyu Chemical Corporation.

Nevertheless, a guaranty may be

constituted
to
guarantee
the
performance of a voidable or an
unenforceable contract. It may also
guarantee a natural obligation.

Q: Do we have a contract of guaranty or

suretyship?
A: A contract of suretyship.
A very important provision is Article 2053.
Q: Why?
A: Because
Q: Who is the creditor?
A: the creditor is Atok Finance.
Q: How did Sanyu Chemical try to pay off
Atok? What happened in November 1981?
A: Sanyu Chemical Corporation assigned
three receivables to Atok Finance as
payment for their obligation.
Q: Why did it assign to Atok Finance?
A: Because it cannot pay for the obligation.
Maam: Because here with the assignment
it gives Atok Finance the right to collect
from the debtors of Sanyu Chemical. So the
proceeds to be collected will be applied to
the obligation to pay to Atok Finance.
However, they were not able to collect. That
is why they were going against the sureties
of Sanyu Chemical.

Article 2053. A guaranty may also be given

as security for future debts, the amount of
which is not yet known; there can be no
claim against the guarantor until the debt
is liquidated. conditional obligation may
also be secured.

Q: What is a continuing guaranty or suretyship?

A: (inaudible) It is one which is not limited to a
single transaction but which contemplates a
future course of dealings, covering a series of
transactions generally for an indefinite time or
until revoked. It covers all transactions including
those arising in the future, which are within the
description or contemplation of the contract of
guaranty, until the expiration or termination
thereof.

Q: So are the sureties here liable?

A: Yes, they are liable.
Q: Now when was the obligation or the
contract if loan perfected?
A: It was perfected at the time of the
agreement itself.

This document is for INTELLIGENT TRANSCRIBERS WHO ARE NOT DULL AND LAZY.

TITLE XV. GUARANTY ARTICLE 2047-2084

bond for each financing or credit

accommodation extended to the principal
debtor.
Q: Now how was this suretyship agreement
one of a suretyship agreement? What was
provided in the agreement?

Q: What is the ruling of the court that there

is no consideration for that continuing
suretyship agreement?
A: The SC held in the wise, Surety
agreements may secure future debts.
It is true that a guaranty or a suretyship
agreement is an accessory contract in the
sense that it is entered into for the purpose
of securing the performance of another
obligation which is denominated as the
principal obligation. It is also true that Article
2052 of the Civil Code states that "a
guarantee cannot exist without a valid
obligation." This legal proposition is not,
however, like most legal principles, to be
read in an absolute and literal manner and
carried to the limit of its logic.
Future debts, even if the amount is not yet
known, may be guaranteed but there can
be no claim against the guarantor until the
amount of
the debt is ascertained or fixed or
demandable.
Rationale: a contract of guaranty is
subsidiary
Article 2053. A guaranty may also be
given as security for future debts, the
amount of which is not yet known; there can
be no claim against the guarantor until the
debt is liquidated. A conditional obligation
may also be secured.
Here the SC explained the nature of a
continuing
surety
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, commonly
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; which such
surety agreement, there would be no need
to execute a separate surety contract or

This document is for INTELLIGENT TRANSCRIBERS WHO ARE NOT DULL AND LAZY.

TITLE XV. GUARANTY ARTICLE 2047-2084

Q: Now how was this suretyship agreement

one of a suretyship agreement? What was
provided in the agreement?
A:The terms any indebtedness of the
Principal now or hereafter held by the Surety
is hereby subordinated to the indebtedness of
the Principal to the Creditor; and if the
Creditor so requests, such indebtedness of
the Principal of the Surety shall be collected,
enforced and shall be paid over to the
Creditor and shall be paid over to the Creditor
and shall be paid over to the Creditor on
account of the indebtedness of the Principal
to the Creditor but without reducing or
affecting in any manner the liability of the
Surety under the provisions of this suretyship.
For valuable and/or other consideration . . .,
jointly
and
severally
unconditionally
guarantee
to
ATOK
FINANCE
CORPORATION (hereinafter called Creditor),
the full, faithful and prompt payment and
discharge of any and all indebtedness of
[Sanyu Chemical] . . . (hereinafter called
Principal) to the Creditor. The word
"indebtedness" is used herein in its most
comprehensive sense and includes any and
all advances, debts, obligations and liabilities
of Principal or any one or more of them,
here[to]fore, now or hereafter made, incurred
or created, whether voluntary or involuntary
and however arising, whether direct or
acquired by the Creditor by assignment or
succession, whether due or not due, absolute
or contingent, liquidated or unliquidated,
determined or undetermined and whether the
Principal may be may be liable individually of
jointly with others, or whether recovery upon
such indebtedness may be or hereafter
become barred by any statute of limitations,
or whether such indebtedness may be or
otherwise become unenforceable.

This document is for INTELLIGENT TRANSCRIBERS WHO ARE NOT DULL AND LAZY.