GUARANTY

Facts: FINMAN GENERAL ASSURANCE CORPORATION VS. ABDULGANI SALIK

G.R. NO. 84084 AUGUST 20, 1990

Facts:
Private respondents, allegedly applied with Pan Pacific and were assured employment abroad.
In consideration thereof, they allegedly paid fees totalling P30,000.00. But despite numerous
assurances of employment abroad, they were not employed. Accordingly, they filed a joint
complaint with the POEA against Pan Pacific for Violation of Articles 32 and 34(a) of the Labor
Code, as amended, with claims for refund of a total amount of P30,000.00.

Issue:
Whether Secretary of Labor acted without or in excess of jurisdiction and with grave abuse of
discretion amounting to lack of jurisdiction in directing Finman to pay jointly and severally with
Pan Pacific the claims of private respondents on the basis of the suretyship agreement between
Finman and Pan Pacific and the POEA.

Held:
No. It remains uncontroverted that herein petitioner and Pan Pacific entered into a suretyship
agreement, with the former agreeing that the bond is conditioned upon the true and faithful
performance and observance of the bonded principal of its duties and obligations. It was also
understood that under the suretyship agreement, herein petitioner undertook itself to be jointly
and severally liable for all claims arising from recruitment violation of Pan Pacific, in keeping
with Section 4, Rule V, Book I of the Implementing Rules of the Labor Code.

GUARANTY

BRIGIDO R. VALENCIA vs. REHABILITATION FINANCE CORPORATION and CA

G.R. No. L-10749

Facts: In June 1952, RFC’s Board of Governors passed a resolution awarding the contract for
construction of the building to Sanchez & Antigua Engineering Co.; the electrical installation to
Lorenzo Sarmiento; and the plumbing installations to petitioner Valencia. Petitioner was notified
of the same through a letter, in which he was also invited in RFC’s office for a contract signing
and to post the performance bond for 20% of the contract price of P12,800.. However, due to
the petitioner’s failure to sign the contract, respondent awarded the same to the contractor of
the building.

Issue: Whether or not the contract was perfected with the non-fulfillment of the condition
requiring the giving of a performance bond.

Held: Yes. The contract was perfected. The giving of a performance bond presupposes
existence of a contract. The existence of the contractual relation between the parties did not
depend upon the posting of a performance bond.
REAL MORTGAGE

CHINA BANKING CORPORATION, vs. FAUSTINO LICHAUCO ET AL.

G.R. No. L-22001 | 1924-11-04

FACTS: Lichauco & Company, Inc., has a loan with China Banking Corporation. Sps Lichauco
executed a mortgage in favor of CBC to secure the payment of a part of this loan in the amount
of P50,000 with interest at 9%. It was agreed that in case of nonfulfillment of the contract, the
mortgage would stand as security also for the payment of all the costs of the suit and expenses,
including attorney’s fees, which by way of liquidated damages are fixed at 5% of the principal. In
addition, it states that if respondents should fail to pay P50,000, the mortgage shall be in full
force and effect. Lichauco & Co., Inc., and respondents executed another document, in which,
they ratified the former mortgage and stated that the payment of P50,000 shall continue to be
secured in the same manner and with the same property, and shall earn interest at 12%/year.

Issue: Whether or not the obligation of Spouses Lichauco lacked consideration, because what
they guaranteed with the mortgage was a debt of Lichauco & Co., Inc.

Held: No. As a mortgage is an accessory contract, its consideration is the very consideration of
the principal contract, from which it receives its life, and without which it cannot exist as an
independent contract, although, as in the instant case, it may secure an obligation incurred by
another (art. 1857 of the Civil Code).

REAL MORTGAGE

UCPB v. Sps. Beluso August 17, 2007 No. 159912

Facts:
UCPB granted Sps. Beluso a Promissory Notes Line under a Credit Agreement whereby the
latter could avail from the former credit up to the maximum amount of P1.2 M, which was
amended to increase P2.35 M. Sps Beluso have executed a total of 5 promissory notes, the last
two of which they claim to have never been released to them. In any case, UCPB applied
interest rates on the different promissory notes ranging from 18% to 34%, and thereafter
continued to charge interests and penalties. When the respondents failed to make payments,
UCPB foreclosed their mortgaged properties. Respondents filed a petition for annulment
thereof. RTC ruled in favor of respondents and the CA affirmed thereof.

Issue: WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS

AND REVERSIBLE ERROR WHEN IT AFFIRMED THE DECISION OF THE TRIAL COURT
WHICH ANNULLED THE FORECLOSURE BY PETITIONER OF THE SUBJECT
PROPERTIES DUE TO AN ALLEGED INCORRECT COMPUTATION OF RESPONDENTS
INDEBTEDNESS.

Ruling: We agree with UCPB and affirm the validity of the foreclosure
proceedings. Since we already found that a valid demand was made by UCPB upon the
spouses Beluso, despite being excessive, the spouses Beluso are considered in default with
respect to the proper amount of their obligation to UCPB and, thus, the property they mortgaged
to secure such amounts may be foreclosed. Consequently, proceeds of the foreclosure sale
should be applied to the extent of the amounts to which UCPB is rightfully entitled.

As argued by UCPB, none of the grounds for the annulment of a foreclosure sale are
present in this case. The grounds for the proper annulment of the foreclosure sale are the
following: (1) that there was fraud, collusion, accident, mutual mistake, breach of trust or
misconduct by the purchaser; (2) that the sale had not been fairly and regularly conducted; or
(3) that the price was inadequate and the inadequacy was so great as to shock the conscience
of the court.

REAL MORTGAGE

Rural Bank of Toboso vs. Agtoto

G.R. No. 175697, March 23, 2011

Facts: Agtoto executed a SPA authorizing her husband, Rodney, to secure a loan on her behalf
and mortgage a registered land that she owned. Using the SPA, Rodney got a loan of
P130,500.00 from the Rural Bank of Toboso, Inc. with the P61,068.00 portion secured by a real
estate mortgage on his wife's land. On the following day, he secured the remaining P69,432.00
of the loan with a chattel mortgage over two service boats and one Yanmar Marine engine. After
paying only P14,500.00, Agtoto failed to pay her loan with the Bank. After several unheeded
demands to pay, the Bank extra judicially foreclosed the mortgage. After notice and publication,
the sheriff foreclosed the mortgage on the land and sold it at public auction to the Bank, which
made the highest bid. The sheriff subsequently issued a certificate of sale in the Bank's favor.
Later, Agtoto filed a complaint with the Regional Trial Court (RTC) of Bacolod City against the
Bank for the annulment of the sale of her land, damages, and injunction with prayer for the
issuance of a temporary restraining order (TRO). The RTC rendered a decision in favor of
Agtoto, ordering the Bank to pay the former the amount of its bid for her land. Agtoto appealed
to the Court of Appeals (CA) from the decision, asserting that the RTC erred in not declaring the
foreclosure sale null and void. The CA affirmed the trial court's decision with modification.
Hence, the filing of this petition for review by both parties.

Issue: Whether or not the Bank validly foreclosed on Agtoto's mortgaged land.

Ruling: Yes. Agtoto contends that the foreclosure sale was void since she did not authorize her
husband, Rodney, to act as her attorney-in-fact for purposes of the foreclosure proceedings. As
the appellate court correctly ruled, however, the powers she vested in Rodney as her attorney-
in-fact in connection with the mortgage of her land included the power to constitute the
mortgagee bank as Rodney's attorney-in-fact for foreclosure purposes for, otherwise, the grant
to him of the power to enter into a mortgage contract would have been incomplete in the usual
course.Here, moreover, the SPA authorized Rodney to make, sign, execute, and deliver
contracts, documents, agreements and other writings of whatever nature or kind, with any
person or persons, upon such terms and conditions as were acceptable to him as attorney-in-
fact.