GR L 45122; (May, 1939) (Digest)
G.R. No. L-45122; May 5, 1939
VISAYAN SURETY & INSURANCE CORPORATION, plaintiff-appellee, vs. FRUCTUOSA TABARES, PANFILO SABELLANO, and ROMAN A. CRUZ, defendants. ROMAN A. CRUZ, appellant.
FACTS
Visayan Surety & Insurance Corporation (plaintiff) filed an action to enforce a written bond (Exhibit A) executed jointly and severally by defendants Fructuosa Tabares, Panfilo Sabellano, and Roman A. Cruz. The bond guaranteed the plaintiff’s own surety obligation to Bachrach Motor Co., Inc., for a promissory note. The plaintiff paid part of the note and sought indemnity from the defendants under the bond. The defendants Tabares and Sabellano later entered into a separate agreement (Exhibit C) with the plaintiff regarding the conversion of certain automobiles pledged as security, but this agreement did not result in full payment. The trial court held all defendants, including appellant Roman A. Cruz, jointly and severally liable. Cruz appealed, arguing his liability was only subsidiary and that the later agreement novated the original bond.
ISSUE
1. Whether appellant Roman A. Cruz is solidarily liable under the bond.
2. Whether the subsequent agreement (Exhibit C) between the plaintiff and defendants Tabares and Sabellano novated the original contract of guaranty, thereby releasing Cruz from liability.
RULING
1. Yes, the appellant is solidarily liable. The bond expressly stated that the undersigned bound themselves “jointly and severally.” This language imposes direct and personal liability for the entire obligation, not merely subsidiary liability. Under the Civil Code, a guarantor who binds himself jointly and severally incurs solidary liability (Articles 1137, 1138, 1837, Civil Code).
2. No, there was no novation. The subsequent agreement (Exhibit C) did not expressly or impliedly novate the original contract of guaranty. Its purpose was to facilitate payment by Tabares and Sabellano and lift an attachment on the automobiles; it did not contain stipulations incompatible with the original bond. For novation to occur, it must be declared expressly or the old and new obligations must be wholly incompatible (Article 1204, Civil Code). The agreement did not alter the essential obligation under the note, as the defendants, as owners of the automobiles, could dispose of them without affecting the underlying debt.
The decision of the trial court was affirmed. Appellant Roman A. Cruz is ordered to pay, jointly and severally with the other defendants, the sum due plus attorney’s fees, interest, and costs.
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