G.R. No. 29588 & G.R. No. 29753, December 29, 1928
STANDARD OIL CO. OF NEW YORK, Plaintiff-Appellant, vs. CHO SIONG, ET AL., Defendants-Appellees.

ONG GUAN CAN, Plaintiff-Appellant, vs. STANDARD OIL CO. OF NEW YORK, Defendant-Appellee.

FACTS

Two cases were jointly prosecuted. In G.R. No. 29588 , Standard Oil Co. of New York (Standard Oil) sued Cho Siong and his surety, Ong Guan Can, to recover P2,197.42, representing: (1) a P64.46 balance from Cho Siong’s own agency contract for selling Standard Oil’s products, and (2) P3,132.96 which Cho Siong assumed from the debt of the former agent, Tong Kuan, under a separate instrument. Cho Siong had deposited P1,000 with Standard Oil as security. Ong Guan Can signed a P3,000 surety bond guaranteeing Cho Siong’s obligations under the agency contract only.

In G.R. No. 29753, Ong Guan Can sued Standard Oil for P15,000 in damages arising from a preliminary attachment levied against his property in the first case, which lasted only two days.

The trial court held Cho Siong liable for P2,132.96 (the Tong Kuan debt, minus part of the deposit) and P64.46 (his own agency balance), with attorney’s fees. It held Ong Guan Can liable only for P64.46 plus attorney’s fees. It also absolved Standard Oil from Ong Guan Can’s claim for damages.

ISSUES:
1. In G.R. No. 29588 : What is the extent of the liability of Cho Siong and his surety, Ong Guan Can?
2. In G.R. No. 29753: Is Standard Oil liable for damages due to the preliminary attachment?

RULING

1. In G.R. No. 29588 , the Supreme Court MODIFIED the trial court’s decision.
* Cho Siong’s Liability: Cho Siong is liable for the full P2,197.42 (P64.46 + P3,132.96 – P1,000 deposit applied). However, he is not liable for attorney’s fees. The fees stipulated in the agency contract do not apply because he incurred no net liability under that specific contract (the P1,000 deposit covered the P64.46 debt and more). The separate assumption of Tong Kuan’s debt contained no stipulation for attorney’s fees.
* Ong Guan Can’s Liability: Ong Guan Can, as surety, is absolutely relieved from liability. His bond guaranteed only Cho Siong’s obligations under the agency contract. Since Cho Siong had no net liability under that contract (the deposit exceeded the debt), the surety’s obligation did not arise. Furthermore, the surety bond did not cover the separate contract where Cho Siong assumed Tong Kuan’s debt. A contract of suretyship is strictly construed and not extended beyond its terms.

2. In G.R. No. 29753, the Supreme Court AFFIRMED the trial court’s decision. Standard Oil is not liable for damages. The Court upheld the trial court’s finding that Ong Guan Can failed to prove any actual damage suffered from the two-day attachment.