Case Digest (A.C. No. 7961)
Facts:
On October 29, 1920, the National Sporting Club of Manila executed a promissory note payable in four months for the sum of P9,360, given for commercial purposes, with Jose Ma. Cacho as the payee. Below the Club's signature on the promissory note, the following personal guaranty was appended: “We guarantee this obligation,” signed individually by J. A. Valles, J. L. Mateu, G. J. Heffting, Ed. Chesley, and Baldomero Roxas. When the promissory note was not paid upon maturity, Jose Ma. Cacho filed a case against the National Sporting Club (principal debtor) and the guarantors. Except for Baldomero Roxas, none of the defendants interposed a defense. Roxas denied generally the complaint’s allegations and asserted his right to the benefit of division among cosureties. He prayed that if held liable, he would only be responsible for his aliquot share and that the National Sporting Club's property should be exhausted prior to seeking payment from the guarantors.
After default jud
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Case Digest (A.C. No. 7961)
Facts:
- Transaction and Parties
- On October 29, 1920, the National Sporting Club of Manila issued a promissory note payable in four months to Jose Ma. Cacho, or order, for the amount of P9,360, representing value received for commercial purposes.
- Below the signature of the National Sporting Club on the note, five individuals—J. A. Valles, J. L. Mateu, G. J. Heffting, Ed. Chesley, and Baldomero Roxas—signed a personal guaranty stating, “We guarantee this obligation.”
- Default and Legal Proceedings
- Upon maturity, the National Sporting Club failed to pay the promissory note.
- Jose Ma. Cacho filed an action against the National Sporting Club and the five guarantors for payment of the note.
- The National Sporting Club and four guarantors did not appear or defend; only Baldomero Roxas responded. Roxas denied the complaint generally and asserted:
- The right to division among cosureties, meaning that each guarantor should only be liable for their proportional share.
- Before requiring him to pay, the property of the National Sporting Club should be exhausted.
- Trial Court Decisions
- On May 9, 1922, judgment was entered against the National Sporting Club by default and also against all five guarantors, holding each liable for their pro rata share of the total debt with interest, contingent on the Club’s insolvency or non-payment.
- On June 20, 1922, the trial court modified its decision with respect to the guarantors, ruling that if any surety proved insolvent, his share would fall proportionally on the other solvent sureties.
- Baldomero Roxas appealed the modification of June 20, 1922, contending that the court erred because the guaranty did not provide for solidary liability and thus he should only be liable for his proportional share.
Issues:
- Whether several simple sureties who signed a personal guaranty without expressly stipulating solidary liability can be held liable beyond their aliquot shares if one or more of the sureties is insolvent.
- Whether the trial court correctly modified its judgment to hold solvent sureties liable for the insolvent cosurety’s portion of the debt.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)