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PACIFIC VS IAC
Oct 24, 1975- Celia Regala applied and ibtained from pt the issuance and use of Pacificard credit card
under terms and conditions. Copy furnished to defendant on date f application and expressly agreed that the
use of the card is governed by the terms and conditions.
- Same date, defendant Robert Regala Jr m spuse of deff, Celia Regalia executed Gurantor Undertaking
in favour of apelee Bank where the latter agreed severally of Celia tp pay Pacific Baking corp upon
any demand and all indebtedness , obligations, charges or liabilities due and incurred by said CElua
with the use of the card or renewals thereto
- Also agreed that, any changes pf pr novation in the terms and coniditons in connection with the
issuance or use of the card or any extension of time to pay such obligation, charges, liabilities shall not
in any manner release me/ us from responsibility.. and such is a continuing one and shall subsist and
bine me until the liabilities of said Celia have been fully satisfied.

PtPacific Banking corp contracted wth accredited business estalishments to honor [urchases of goodsby pacific
card holders and the ocst to be advanced by the pt for the account of defendant cardholder, nd the holder pays any
statement of accoynt rendered by the pt. overdue shall earn itrest of 14 per annum.
Celiam as oacificard holder, purchased the cost amounting to 92803.98 at time filing of complaint. There was
faikure of celia to payso a demand sent to ccelia and defendant, Roberto under his guarantor undertaking.
-

Subsequent complaint becos of failure to settle. Celia was in default for failure to file answer. Roberto
fled answer with counterclaimadmiting execution of gurantors undertaking but with the understanding
that liability would be limited to 22k per month.
After presentation of evidence, fire struckmanila inclu whre the instant case was pending. Upon
petition for reconstitution, it was duly reconstituted.

**the undertaking signed by Roberto alto denominated as guarantor was in substance a contract of surety. A contract
of guaranty gurantor binds himself to the creditor to fulfil he obligation of the principal debtor onl in case the later
shud fail to do so, in a contract of suretyship, the surety binds himself solidarily wuth the principal debtor.
AS a guaranty, a surety may secure additional and future debts of the principal debtor the amount of which is not
known. Gurantor or surety does not incur iabilitu unless principal debtor is held liable. Surety altho solidary liable
with the principal debtor is diff from debtor. It doesnt mean that the surety cant be held liable to the sam extet as the
principal debtor. The nature and extent of the liability of a gurantor or a suretyis determined by the clause in the
contract.
"all the other rights of the guarantor are not thereby lost by the guarantor becoming liable solidarily and therefore a
surety." It further ruled that although the surety's liability is like that of a joint and several debtor, it does not make
him the debtor but still the guarantor (or the surety), relying on the case of Government of the Philippines v. Tizon.
G.R. No. L-22108, August 30, 1967, 20 SCRA 1182. Consequently, Article 2054 of the Civil Code providing for a
limited liability on the part of the guarantor or debtor still applies.
It is true that under Article 2054 of the Civil Code, "(A) guarantor may bind himself for less, but not for more than
the principal debtor, both as regards the amount and the onerous nature of the conditions. 2 It is likewise not
disputed by the parties that the credit limit granted to Celia Regala was P2,000.00 per month and that Celia Regala
succeeded in using the card beyond the original period of its effectivity, October 29, 1979. We do not agree however,
that Roberto Jr.'s liability should be limited to that extent. Private respondent Roberto Regala, Jr., as surety of his
wife,expressly bound himself up to the extent of the debtor's (Celia) indebtedness

2 E ZOBEC INC VS CA
Resp spouses Raul and Elea Claveria doing business under the name Agro Brokers applied loan with respondent
bnk and trust corporation ( now SolidBank) in 28755m to finance purchase of 2 maritime barges and one tigboar to

be used for their molasses business. Granted subject to the condition that resp spouses execute a chattel mortgage
over three vesselsto be acquired and that continuing guarantee be executed by Ayala Untl Phil inc now herein
petitioners, n favour of solidbank. Respondent sps agreed to the arranfement. So chattel and continuing guaranty
wer executed.
-sps defaulted in of the entire obligation. So solidbank filed complaint sum of money with writ of prel. Attachment
against sps and pt.
Pt- moved to dismiss on ground that as guarantor of loan was extinguished. That it has lost its right tobbe subrogated
to the first chattel mortgage in view od solibanks falure to register the chattel with the appro. Gvt agency.
Solidbanl opposed. Raused art 2080 not applicable becos pt is not gurantor but a surety. .

For and in consideration of any existing indebtedness to you of


Agro Brokers, a single proprietorship owned by Mr. Raul Claveria for the
payment of which the undersigned is now obligated to you as surety and in
order to induce you, in your discretion, at any other manner, to, or at the
request or for the account of the borrower, x x x '
Conti. G. docu:

So here, zobel signed as surety. Even if title is contin. G. it is more of the


content and intention of parties. In fact, lletter of def spsand zobel to ptit os
requesting that the chattel mor on vessls and tugboats be waived or
rescinbeded by the bank as said loan is covered by the con. G. by zobel in
favour of pt thus thwarfting the claim of def. now that chattel mortgae s an
essential condition of the guarnaty. It saod in his etter that, becos of the con.
G. in favour of pt, the chattel mort is rendered unncesary and redundant.
The chattel mort is an additional security and should ot be consdired as
payment of the debt in case of dailure of payment. Same with failure to
register, extinction of the liability would not lie.

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