GR L 49180; (August, 1950) (Digest)
G.R. No. L-49180 & L-49181; August 29, 1950
RUFINO BUENO, petitioner, vs. DOMINADOR B. AMBROSIO and THE COURT OF APPEALS, respondents.
DOMINADOR B. AMBROSIO, plaintiff-appellee, vs. ANTONIO ARIZABAL and PILAR ARIZABAL, defendants-appellants.
FACTS
On December 27, 1937, Antonio L. Arizabal, as principal, and Pilar A. Arizabal and Rufino Bueno, as sureties, executed a surety bond in favor of D.B. Ambrosio & Co. in the amount of P20,000. The bond guaranteed the payment of “all obligations incurred by said Antonio L. Arizabal with the said Brokerage Company for or on his own personal account.” A consolidated statement of account (Exhibit B) was signed by Arizabal on January 3, 1938, showing a balance of P30,385.08 against him as of December 31, 1937. D.B. Ambrosio & Co. filed a suit to recover the amounts, and both the trial court and the Court of Appeals held the principal and sureties solidarily liable for P20,000 (the bond limit), and Arizabal alone liable for the excess of P10,385.08. The sureties appealed.
ISSUE
Whether the surety bond covers obligations incurred by the principal prior to its execution, thereby making the sureties liable.
RULING
Yes. The Supreme Court affirmed the decision of the Court of Appeals. The bond expressly guaranteed “all obligations incurred” by Arizabal, using the past tense. The circumstances also indicated that the bond was for past obligations: Arizabal had already ceased to be the manager of the brokerage department when the bond was executed, so there was no future employment to secure. The bond therefore constituted a guaranty for a pre-existing debt under Articles 1822 and 1825 of the Civil Code. The one-year grace period for making a claim under the bond began on December 27, 1937 (the date of the bond), not from the date of the accounting (January 3, 1938). The action filed in 1939 was thus timely. The liability of the sureties is solidary and limited to the bond amount of P20,000.
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