Facts: Felicisimo Reyes owed Rosa Reyes, and Pedro and Consolacion Reyes

(creditors) certain amounts. Both creditors obtained writs of preliminary

attachment against Felicisimo. Felicisimo and his surety, Imperial Insurance,
posted bonds for dissolution of attachment. Both cases were tried jointly, and
the creditors won the case against Felicisimo. The CA affirmed and remanded
the case to the lower court (presided by Judge de los Angeles) for execution.
Judge de los Angeles issued the writs of execution, but the sheriff returned
them unsatisfied. The creditors sued for recovery on the surety bonds.
Imperial opposed. The judge ruled against the counter-bonds (probably
meaning that the creditors can recover from the bonds, not sure
though). The creditors moved to execute. Imperial moved for Judge de los
Angeles to reconsider decision, but the motion was denied. Judge de los
Angeles granted writ of execution against the bonds filed by
Imperial. Imperial appealed to the CA. CA dismissed. Imperial elevated the
case to SC.

Issue (relevant): WON the creditors can go after the surety (Imperial) without
first exhausting Felicisimos properties.

Held: Yes, in this case. Imperial bound itself solidarily with Felicisimo on the
counterbonds. Article 2059 par 2 applies (excussion [previous exhaustion of
the property of the debtor] shall not take place if the guarantor has bound
himself solidarily with the debtor).

Rizal Commercial
Banking

Corporation,
petitioner, vs.
Hon. Jose P. Arro,
Judge of the
Court of First
Instance
of Davao,and
Residoro Chua,

respondents.
Date:31 July 1982
Ponente:De Castr
o,J
Facts:

Private
respondent
Residoro Chua,

with Enrique Go,

Sr., executed a
comprehensivesur
ety agreement
to guaranty,above
all, any existing or
future
indebtedness of

Davao
Agricultural
Industries
Corporation
(Daicor), and/or
induce thebank at
anytime or from
time to time to

make loans
or advances or to
extend credit
to saidDaicor,
provided that
theliability shall
not exceed ay any
time

Php100,000.00.A
promissory note
for
Php100,000.00
(for additional
capital to the
charcoal buy
andsell and the

activated
carbonimportatio
n business) was
issued in favor of
petitionerRCBC
payable a month
after execution.
This was signed

by Go inhis
personalcapacity
and in behalf of
Daicor.
Respondent Chua
did not sign in
said
promissorynote.

As the note was

notpaid despite
demands, RCBC
filed a complaint
for a sum of
money against
Daicor, Go and
Chua.

The complaint
against Chua was
dismissed upon
his motion,
alleging that
thecomplaint
states no cause
of actionagainst

him as he was not

a signatory to the
noteand hence he
cannot be held
liable. This was s
o despite RCBCs
opposition,
invokingthe

comprehensive
surety agreement
which it holds to
cover not just the
note inquestion
but alsoevery
other
indebtedness

that Daicor may

incur from
petitioner bank.
RCBC moved for
reconsideration
of the
dismissalbut to no

avail. Hence, this

petition.
Issue:

WON respondent
Chua may be held
liable with Go and
Daicor under the
promissorynote,

even if he was
not asignatory to
it, in light of the
provisions of
thecomprehensive
surety agreement
wherein he bound
himself with Go

andDaicor,
assolidary
debtors, to pay
existing and
future debts of
said corporation.
Held:

Yes, he may be
held liable.
Order dismissing
the complaint
against
respondent
Chuareversed and
set aside.

Caseremanded to
court of origin
with instruction
to set
asidemotion to
dismiss and to
require defendant

Chua to answer
thecomplaint.
Ratio:

The
comprehensive
surety agreement
executed by
Chua and Go, as

president
andgeneral
manager,
respectively,of
Daicor, was to
cover existing as
well as
futureobligations

which Daicor may

incur with RCBC.
This was only
subject tothe
provisothat their
liability shall not
exceed at any
one time the

aggregate
principal amount
of Php100,000.00.
(Par.1of said
agreement).
The agreement
was executed

to induce
petitioner Bank to
grant any
application for
aloan
Daicor would
request
for.According to

said agreement,
the guaranty
iscontinuing and
shall remain in
full force or
effect until
the bank is

notifiedof
itstermination
During the time
the loan under
the promissory
note was
incurred, the
agreement

wasstill in full
force and effect
and isthus
covered by the
latter agreement.
Thus, even if
Chua did not sign
the promissory

note, he is still
liable by virtue
of the
suretyagreement.
The only condition
necessary for him
to be

liable under the

agreementwas that
Daicor is or
maybecome liable
as maker,
endorser, acceptor
or otherwise.

The
comprehensive
surety agreement
signed by Go and
Chua was as an
accessoryobligati
on dependent
upon theprincipal

obligation, i.e.,
the loan obtained
by Daicoras
evidenced by the
promissory note.
The surety
agreementunequiv
ocally shows that

it was executed
to guarantee
futuredebts that
may be incurred
by Daicor with
petitioner, asallow
ed under NCC
Art.2053.

A guaranty may
also be given as se
curity for future
debts, the amount
of which isnot yet
known; there can
be no claim

against the
guarantor until
the debt
isliquidated. A
conditional
obligation may also
be secured.