Case Digest (G.R. No. L-13708)
Facts:
Security Bank & Trust Co., Inc., Executor and Appellee v. Globe Assurance Co., Inc., Claimant and Appellant, G.R. No. L-13708, April 27, 1960, the Supreme Court En Banc, Bengzon, J., writing for the Court.The appellant, Globe Assurance Co., Inc., filed three monetary claims against the estate of the deceased Vicente L. Legarda (whose estate is represented by Security Bank & Trust Co., Inc. as executor): (1) an unpaid promissory note; (2) an indemnity claim arising from a December 2, 1955 indemnity agreement signed by Gustavo Sancho, Vicente L. Legarda and Jose S. Sarte to indemnify Globe for its liability under a December 5, 1955 P8,000 promissory note in favor of Philippine National Bank; and (3) an indemnity claim arising from indemnity agreements (involving Vicente L. Legarda, Jose Robles and Magno Romasanta) to hold Globe harmless for two loans of P6,000 for which Globe had acted as surety.
The Manila Court of First Instance, after hearing, issued an order dated August 29, 1957, awarding Globe P250 on its first claim but dismissing its second and third claims. The court below treated the indemnity clause — which obligated the indemnitors “to indemnify [the Company] … as soon as demand is received from the creditor, or as soon as it becomes liable to make payment … whether … actually paid or not” — as contrary to public policy and therefore void, especially because Globe had not yet paid the creditors at the time it presented its claims.
Globe appealed the dismissal of the second and third claims to the Supreme Court. The Court considered precedent, notably Alto Surety v. Aguilar, L-5625 (March 16, 1954), examined the contractual indemnity clauses and attendant facts (the P8,000 note matured March 4, 1956 and remained unpaid as of the claim’s presentation in December 1956; the Robles loans of April 1954 resulted in a judgment holding Robles and Globe jointly and severally liable, Globe’s liability limited to P6,...(Subscriber-Only)
Issues:
- Is an indemnity stipulation that entitles a surety to demand indemnity “as soon as demand is received from the creditor, or as soon as it becomes liable to make payment … whether … actually paid or not” enforceable against the indemnitors and therefore chargeable to the estate of a deceased indemnitor?
- If enforceable, what monetary relief (principal, interest, attorney’s fees) is the claimant entitled to and may payment be made directl...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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