G.R. No. L-9306 - Southern Motors, Inc. vs. Barbosa

The right of guarantors to demand the exhaustion of the principal debtor's property is contingent upon the absence of a pledge or mortgage as special security for the principal obligation.
Guarantees without such security are governed by Title XV of the Civil Code, while pledges and mortgages fall under Title XVI.
Articles 2087 and 2126 of the Civil Code outline the implications of pledges and mortgages, emphasizing the creditor's rights to the property.

An ordinary personal guarantor may demand the exhaustion of the principal debtor's property.
However, the creditor retains the right to secure a judgment against the guarantor before exhausting the principal debtor's assets.
The guarantor is entitled to defer the execution of the judgment until the properties of the principal debtor have been exhausted.

The case originated from a decision by the Court of First Instance of Iloilo, which ordered the defendant, Eliseo Barbosa, to pay a specified amount to the plaintiff, Southern Motors, Inc.
The plaintiff sought to foreclose a real estate mortgage executed by Barbosa as security for a debt owed by Alfredo Brillantes, who failed to fulfill his obligation.
Barbosa admitted the allegations but claimed that the plaintiff did not exhaust remedies against Brillantes, who was solvent and owned properties.

The plaintiff's motion for summary judgment was initially denied as premature, leading to a motion for reconsideration and a request to transfer the case to another branch of the court.
The case was subsequently assigned to Judge Makalintal, who rendered a decision that Barbosa appealed.
Barbosa's appeal included claims of procedural errors, including lack of notice regarding the motion for reconsideration and the alleged absence of issues for resolution.

The first assignment of error regarding lack of notice was refuted by evidence showing that Barbosa's counsel was served with the motion for reconsideration.
The second assignment of error was dismissed as the court had sufficient issues to resolve based on Barbosa's admissions and the affirmative defense presented.
The third assignment of error concerning du...continue reading